Annual increase in compensation limits

United Kingdom
24/11/2004
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The annual increase in compensation limits for claims in the Employment Tribunal (effective from 1 February 2005) has been announced.

The Employment Rights (Increase of Limits) Order 2004 increases compensation in line with the increase in the Retail Price Index from September 2003 to September 2004.

The increases apply where the event giving rise to the entitlement to compensation (e.g. dismissal) or other payments occurs on or after 1 February 2005. The limits previously enforced are preserved by the Order in relation to cases where the relevant event was before that date.

In particular, the main changes are:

  • the limit on the compensatory award for unfair dismissal will increase from £55,000 to £56,800;
  • the maximum amount of "a week's pay" for the purposes of calculating the basic or additional award of compensation for unfair dismissal or redundancy payments will increase from £270 to £280.

A table of the increase of limits and a copy of the Order can be accessed by clicking here.

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