Employment law update – Compensation caps

1st March 2024

Employment law, Newbury, Berkshire.

8% increases to statutory redundancy and compensation payments announced

As usual, there will be an annual increase to statutory employment awards and compensation limits. These are set out in the Employment Rights (Increase of Limits) Order 2024  [The Employment Rights (Increase of Limits) Order 2024 (legislation.gov.uk)] which is subject to final approval, but it is expected that the rates will be increasing from 6 April 2024. 

Employers particularly need to be aware that the cap for a weeks’ pay for the purposes of statutory redundancy payments that is increasing from £643 to £700 (an increase of 8.8%). This will have an impact on any businesses considering restructuring or redundancies as the minimum statutory redundancy payment will become £1,400 (where the employee is paid at the cap or more), up to a maximum of £21,000. 

In addition, the maximum compensation for unfair dismissal is increasing from £105,707 to £115,115 (up 8.9%) or will remain at 52 weeks’ pay, whichever is the lower amount. 

Minimum awards for certain unfair dismissals, such as for health and safety reasons, are also up 8.8% to £8,533, along with increases to guarantee payments. 

If you have any questions or concerns about how these may impact your business, please contact us on: hello@fentonelliott.co.uk or 01635 896336. 

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