Employment Law changes in April 2016 - Part 2 (Compensation Rates)
Compensation rates get a small boost
This is the second article in our short series regarding the announcements the government have made regarding policy and rulings on financial compensations for employees.
This time we’re discussing the caps on tribunal pay-outs. As of 6 April 2016, the limit on a week’s pay which, amongst other things, is used to calculate statutory redundancy payments will increase from £475 to £479. That’s a whopping 0.84% increase.
Also, the maximum compensatory award for unfair dismissal will increase from £78,335 to £78,962 (provided this is lower than the additional cap in the compensatory award of 52 weeks’ pay). Again, an eye-watering increase of 0.8%. To be fair though, the increased rates do outstrip the current rate of inflation of 0.5%.
These rates only apply where the event that gives rise to the entitlement to compensation or other payment (for example the effective date of dismissal or redundancy) occurs on or after 6 April 2016.
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