News and Events

Compensation Increases

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With thanks to John Bowers QC of Littleton Chambers for providing this information.

Under section 33 of the Employment Relations Act 1999, the Secretary of State is under a duty to increase or decrease various awards as soon as possible after September, in line with any change in the Retail Price Index since the previous September.

This has now been done for the first time. The changes take effect if the 'relevant date' falls on or after 1st February 2000. The 'relevant date' for unfair dismissal claims is the Effective Date of Termination. Other relevant dates (eg for guarantee pay, insolvency rights, unreasonable exclusion from trade union) are set out in the relevant legislation.

The increases are rounded up to the nearest 10p, £10 or £100 depending on the particular limit being increased.

Some of the important changes are:

Unfair Dismissal Basic Award: Limit on a week's pay has increased from £220 to £230.

Redundancy Pay: Limit on a week's pay has increased from £220 to £230.

Guarantee Pay: Limit on a day's pay during short-time or lay-off has increased from £15.35 to £16.10

The maximum compensatory award remains fixed at £50,000.

A full list of the changes can be found in IDS Brief 653 (Jan 2000).