Increases to the cap on a week’s pay and compensatory award cap announced

11 March, 2016

pile of moneyThe Government has announced that on 6 April 2016 the limit on the calculation for a week’s pay (which is used for calculating statutory redundancy payments and the basic award in unfair dismissal claims) will increase from £475 to £479.

The compensation limits and minimum awards that apply to various types of tribunal claims will also increase. Most notably, the statutory cap for the compensatory award for unfair dismissal claims will increase from £78,335 to £78,962.

These new rates will apply when the ‘appropriate date’ for the cause of action (such as the date of termination in an unfair dismissal claim) occurs on or after 6 April 2016. For claims where the ‘appropriate date’ occurs before 6 April, the previous rates will still continue to apply.

The statutory sick pay rate and parental pay rates will remain the same.

Also, a reminder that from 1 April 2016 the ‘National Living Wage’ for over-25 year olds comes into effect. From this date, the following minimum wages will apply:

  • age 25+ – £7.20ph (the National Living Wage)
  • 21-25 – £6.70ph
  • 18-21 – £5.30ph
  • <18 – £3.87ph
  • apprentices – £3.30ph