New compensation limits announced

As is customary at this time of the year, the government has now announced the new increased compensation limits for employment tribunal claims.

The maximum amount of a week’s pay used for calculating various awards, including statutory redundancy payments and unfair dismissal basic awards will increase from £571 to £642 for dismissals taking effect on or after 6 April 2023.

The cap on the maximum unfair dismissal compensatory award of £93,878 also increases to £105,707. Remember that this maximum award for general unfair dismissal claims is the lower of this figure and 52 weeks’ pay gross pay and is subject to the employee’s duty to mitigate their losses that make up this award.  However, where the dismissal was for one of a number of automatically unfair reasons, namely health and safety reasons, whistleblowing or selection for redundancy on either basis, the statutory cap will not apply.