Unfair dismissal payout limits to increase in 2012
5 January 2012
Planned changes to the limits and amounts payable under employment legislation are due to take effect from 1 February 2012. The changes include an increase in the maximum award for unfair dismissal, from £68,400 to £72,300.
The changes are a result of section 34 of the Employment Relations Act 1999, which states that if retail prices index (RPI) inflation for September is higher or lower than the RPI for the previous September, changes must be made to the limits.
Because there has been a change in RPI from September 2010 to September 2011, the changes will reflect a 5.6% increase. New limits will apply where the award or payment occurs on or after 1 February 2012.
The changes also include the following increases:
- the maximum amount of a week's pay used to calculate a statutory redundancy payment and the basic and additional awards for unfair dismissal, from £400 to £430
- the minimum compensation where an individual is excluded or expelled from a union in contravention of section 174 of the Trade Union and Labour Relations (Consolidation) Act 1992, and not admitted or readmitted by the date of the tribunal application, from £7,600 to £8,100
- the limit on the amount of a guarantee payment payable to an employee in respect of any day, from £22.20 to £23.50