The new maximum for a ‘week’s pay’ (used to calculate the basic award in unfair dismissal cases, statutory redundancy pay and a number of other awards) increases from £544 to £571. This means the maximum basic award for unfair dismissal and the maximum amount of statutory redundancy pay (which is worked out taking into account an employee’s age, years of service and weekly pay) increase from £16,320 to £17,130.
The maximum compensatory award also increases, from £89,493 to £93,878 (although this award is also subject to an alternative limit of one year’s gross pay if that is lower).
The minimum basic award for automatic unfair dismissal for, eg on grounds of health and safety or trade union involvement, increases from £6,634 to £6,959.
The new limits apply to dismissals (and other relevant events) occurring on or after 6th April 2022.
Operative date
- 6 April 2022
Recommendation
- Employers should budget for the new increases when considering whether to dismiss an employee.
This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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