The Employment Rights (Increase of Limits) Order 2010 has been published and will come into force from 1 February 2011. The Order increases the limits applying to certain awards of employment tribunals and to other amounts payable under employment legislation.
The main changes are:
- Maximum amount of a ‘week’s pay’ for the purpose of calculating a redundancy payment or the basic or additional award of compensation for unfair dismissal or payments to employees in the event of insolvency – increases from £380 to £400.
- Limit on the amount of compensatory award for unfair dismissal – increases from £65,300 to £68,400.
- Limit on the daily amount of statutory guarantee payment – increases from £21.20 to £22.20.
The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 1 February 2011. The date is determined differently depending on the type of claim brought. In unfair dismissal claims, this date is the effective date of termination of employment. In guarantee payment claims, it is the day in respect of which the payment is due.
The increases reflect an increase of 4.6% in the retail prices index from September 2009 to September 2010.
