The annual compensation limit increase, contained in the Employment Rights (Increase of Limits) Order 2016, has been released. The inflation-linked changes will apply from 6 April 2016.
The main changes are the increase in the maximum compensatory award for unfair dismissal from £78,335 to £78,962 and the maximum amount for a week’s pay (used to calculate statutory redundancy payments or basic awards for unfair dismissal) will also increase from £475 to £479. Note that if the employee’s gross annual pay amounts to less than £78,962 then unfair dismissal compensation remains capped at one year’s gross pay.
These changes will apply if an employee’s date of termination of employment falls on or after 6 April 2016.
The weekly rate of statutory sick pay and the weekly flat rate of statutory maternity, paternity, adoption and shared parental pay will not increase this year.