Employment Law update – Feb 2013

Changes to employment award limits – 1st February 2013

The Employment Rights (Increase of Limits) Order 2012 brought changes from 1st February 2013 to the limit set for the amount of compensatory award payable for most cases of unfair dismissal.  The limit has increased from £72,300 to £74,200.

The Order also brings other changes including:

• The maximum amount of a ‘week’s pay’ when calculating compensation for unfair dismissal or redundancy payment increases from £430 to £450.  As a result, the maximum statutory redundancy payment rises from £12,900 to £13,500 and the maximum unfair dismissal basic award increases from £12,900 to £13,500 (this would be awarded to an employee age 61 with service of 20 or above years.)
  • As a result, the maximum total award for unfair dismissal will increase from £85,200 to £87,700 – maximum unfair dismissal compensatory award + maximum basic award)
  • In the case of unfair dismissal for employee representative, trade union, health and safety and occupational pension trustee reasons, the minimum basic award increases from £5,300 to £5,500.
  • Increase in the maximum amount of guarantee payment made to an employee in respect of any day from £23.50 to £24.20.

The new rates apply to dismissals on or after 1st February 2013 and where an employee receives notice before this date but their notice period ends on or after 1st February, the new limits apply.

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