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Several important updates to employment law compensation limits and statutory payments have now been announced by the government and will come into effect next month.
Key changes from 6 April 2026:
- The cap on unfair dismissal compensation will increase to £123,543 (up from £118,223).
- A week’s pay (used for redundancy and basic unfair dismissal awards) will rise to £751 (up from £719).
- Guarantee pay will increase to £41 per day.
- The minimum basic award in certain automatically unfair dismissals will increase to £9,157.
Statutory payment increases:
- Statutory maternity, paternity, adoption, and shared parental pay will rise to £194.32 per week (or 90% of average weekly earnings if lower).
- Statutory sick pay will increase to £123.25 per week and is expected to become payable from day one of absence.
These changes apply where the relevant employment event (such as termination date) falls on or after 6 April 2026. This may mean therefore that employers may need to redo recent statutory redundancy calculations, for example, if the proposed dismissal will fall after 6 April.
Finally, important to keep in mind… subject to the relevant statutory instrument being passed and the exact date being confirmed, the limit on the compensatory award for unfair dismissal is being abolished for dismissals occurring in or after January 2027. Other caps, including the cap for a week’s pay for the basic award and statutory redundancy payments, will continue to apply.
Please get in touch if you have any questions regarding the issues discussed in this article.
E: help@jma-hrlegal.co.uk / T: +44 (0)1252 821792
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