Employment Rights (Increase of limits) Order 2024

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Employment Rights (Increase of limits) Order 2024

The government has published the annual increase to the compensation limits for Employment Tribunal awards. The changes to the figures are due to come into force on 6 April 2024.

The increase is due to section 34(2) of the Employment Relations Act 1999 where the Secretary of State is to reflect the increases in the retail prices index of 8.9% from September 2022 to September 2023.

The Employment Rights (Increase of Limits) Order 2024 contains the full range of increases. Some important changes to the compensation limits are noted below:

Subject Old limit New limit
Maximum limit on amount of compensatory award for unfair dismissal. £105,707 £115,115
Maximum limit on amount of “a week’s pay” for the purpose of calculating various awards such as a redundancy payment or basic or additional award for unfair dismissal etc. £643 £700
Minimum amount of basic award of compensation for unfair dismissal £7,836 £8,533
Limit on the amount of guarantee payment payable to an employee in respect of any day. £35 £38

The Employment Rights (Increase of Limits) Order 2024 extends to England, Scotland and Wales and the increases will apply where the event giving rise to the entitlement to compensation or other payment occurred on or after 6 April 2024.

Employers should consider the new figures before deciding whether to continue with defending or pursuing any claims with the Employment Tribunal instead of looking to settle matters by way of a settlement agreement or COT3 to ensure the decision is the most financially suitable.

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