Increase of limits applying to awards of employment tribunals

The limits applicable to certain awards of Employment Tribunals will rise from 1st February 2001 under the new index-linked formula. Most significantly the maximum amount of a "week's pay" for the purpose of calculating Basic Awards of compensation for unfair dismissal and for calculating redundancy payments will increase from GBP 230 to GBP 240. In addition the limit on the amount of a Compensatory Award for unfair dismissal will rise from GBP 50,000 to GBP 51,700.

These changes mean that redundancy payments for redundancies that take place on or after 1st February are likely to be slightly higher than at present. Basic Awards for unfair dismissal where the effective date of termination is 1st February or later are also likely to be higher. Compensatory Awards for unfair dismissal could also be higher but as this award is calculated with reference to the actual loss suffered as a result of the dismissal, these awards will only increase if the loss is in excess of GBP 50,000. Awards for terminations before 1st February are unaffected by the changes.

There are other increases which are set out in the "Employment Rights (Increase of Limits) Order 2001", available on the Government's website (http://www.hmso.gov.uk/si/si2001). These increases reflect the increase in the retail prices index from September 1999 to September 2000.

If you require any further information about the impact of the increases or on Tribunal awards generally, please contact Simon Jeffreys or Anthony Fincham by telephone on +44 (0)20 7367 3000 or by e-mail at [email protected] or [email protected].