Higher limits for employment tribunal compensation set.
by Rebecca Caws of thePublican.com's team of legal experts from London solicitors Joelson Wilson
From February 1, the limits for compensation payable to a successful applicant in an employment tribunal case will increase.
So an employer faced with an employment tribunal case may soon face a higher pay-out than he might currently expect. The new levels are set out in the Employment Rights (In-crease of Limits) Order 2003 and include the following:
- £270 (from £260): maximum for a week's pay to calculate the basic or additional award of compensation for unfair dismissal or a redundancy payment
- £55,000 (from £53,500): maximum unfair dismissal compensatory award
- £3,600 (from £3,500): minimum unfair dismissal award where the dismissal is automatically unfair on the grounds of trade union activities, redundancy based on trade union activities, activities as a health and safety representative, activities as a pension scheme trustee, activities as an employee representative or activities as a workforce representative in a Working Time Regulations 1998 case.
The increases are calculated by reference to the retail prices index, so are not particularly high. For example, if a 50-year-old employee, who has been continuously employed for eight years, was to win a claim now, the basic award would be £3,110.
Based on the same example, once the limits increase the basic award will rise to £3,240. An increase of £130 is obviously not too dramatic, but must be considered in conjunction with the £1,500 increase for the compensatory award.
The increase only applies to claims based on an event that occurred on or after February 1 2004. So an award for any existing claims will be calculated on the 2003 figures (shown in brackets left).
This means that if a claim were brought for a dismissal that took place in January 2004, the 2003 figures would still apply, because the event in question (ie the dismissal) occurred before February 1 2004.