Increase in statutory rates and compensation limits – from April 2019
Every year the rates payable for unfair dismissal, redundancy and other employment law claims increase in line with inflation. We set out below the new rates and limits which have been introduced and apply to dismissals where the effective date of termination is on or after 6 April 2019.
Statutory Redundancy Payments (“SRP”)
Employees who are made redundant and have at least two years’ continuous service could be entitled to receive statutory redundancy pay.
Such payments are based on an employee’s length of service which is capped at 20 years and their age:
up to 22 years – half a week’s pay for each year of employment
from 22 years – 1 week’s pay for each year of employment
41 years and over – 1.5 weeks’ pay for each year of employmentWeekly pay is capped at the following rate:
Current weekly rate: £508
New weekly rate: £525 –
Compensation for Unfair Dismissal. If an employment tribunal awards compensation to an employee for unfair dismissal, the award will consist of a basic award and a compensatory award.
This is calculated in the same way as statutory redundancy pay. The maximum basic award is therefore:
Current limit: £15,240
New limit: £15,750
Employers should note that there is a minimum basic award for dismissals based on Trade Union membership or activities, health and safety activities, being an occupational pension scheme trustee or an employee representative:
Current limit: £6,203
New limit: £6,408
This is calculated on the employee’s gross annual salary or the statutory cap (whichever is lower):
Current limit: £83,682
New limit: £86,444
An important point to note is that there are no limits on the awards for automatically unfair dismissals i.e. discrimination or whistleblowing.
Other Important Changes
Failure to allow right to be accompanied (in a disciplianry hearing):
Current cap: £1,016
New cap: £1,050
Failure to give a written statement of particulars of the terms of employment:
Current cap: £1,016 or £2,032
New cap: £1,050 or £2,100
Flexible working regulations:
Current cap: £4,064
New cap: £4,200
If you have any queries on how the rates should be applied, please get in touch.