Increase in Compensation Limits Confirmed

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Posted on 26 Feb 2014

Legislation has been laid before Parliament increasing the cap on the unfair dismissal compensatory award and the maximum amount of a week’s pay from 6 April 2014.

The cap on the compensatory award will increase to £76,574 (up from £74,200) and the amount of a week’s pay will increase to £464 (up from £450). 

The week’s pay figure is used for calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal. Last July the cap on the compensatory award was changed so that the maximum award is now 52 weeks' gross pay or the upper statutory limit.

The limits used to change from 1 February each year but this was changed by the Enterprise and Regulatory Reform Act 2013. 

The new limits apply where the effective date of termination is on or after 6 April 2014.

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