Shropshire law expert highlights changes to compensation in tribunal cases

The changes come into effect on April 6 and will see the Government introduce an annual increase in compensation limits for employment tribunal awards and other statutory payments - meaning the prospect of additional costs for employers.

John Merry, senior partner at Lanyon Bowdler and head of the firm’s employment team, said the planned changes would mean the maximum compensatory award for ordinary unfair dismissal would increase from £105,707 to £115,115 and the limit on a week’s pay would rise from £643 to £700.

He said: “These are important changes and something that people should be aware of, but it is important to remember that the context of the maximum compensatory award is that the limit on these awards would actually be the lower of an amount equal to the employee’s basic annual salary and the stated maximum.

“The limit on weekly pay is applied in a number of contexts, including basic awards for unfair dismissal, statutory redundancy pay and awards of compensation that are made due to an employee not having been issued with written particulars of employment that comply with statutory minimum requirements. This means the maximum possible basic award or statutory redundancy payment will increase to £21,000, while statutory guaranteed pay, which applies when an employee is laid off or subjected to short-time working, will increase from £35 to £38 per day.

“The announced changes reflect inflation rates and will affect dismissals that occur on or after April 6 – meaning successful unfair dismissal claims could result in a greater cost for employers.”