Employment Tribunal Compensation Limits: The 6 April 2024 Update
Updated: Oct 10
On 1 March 2024, the Government announced the annual increase to employment tribunal compensation limits and other statutory payments, including statutory redundancy pay. The new rates took effect on 6 April 2024. They apply to relevant events that happen on or after that date. The limits change every April, so check the current figures on GOV.UK before you rely on these numbers.
The Employment Rights (Increase of Limits) Order 2024
The changes were made by The Employment Rights (Increase of Limits) Order 2024. It came into force on 6 April 2024. It raised the limits on a number of awards and payments.
The principal increases
The table below shows some of the main increases:
New Rate from 6 April 2024 | Previous Rate from 6 April 2023 | |
Cap on a Statutory Week’s Pay (used for calculating various awards, including statutory redundancy pay and unfair dismissal basic awards) | £700 | £643 |
Cap on Statutory Redundancy Pay | £21,000 | £19,290 |
Maximum Basic Award for Unfair Dismissal | £21,000 | £19,290 |
Maximum Compensatory Award for Unfair Dismissal | £115,115 (or a year’s gross pay, whichever is lower) | £105,707 (or a year’s gross pay, whichever is lower) |
Additional Award for Unfair Dismissal (where an employer does not comply with a re-instatement or re-engagement order) | £18,200 to £36,400 | £16,718 to £33,436 |
Statutory Guarantee Pay | £38 per day (subject to a maximum of five days or £190 in any three months) | £35 per day (subject to a maximum of five days or £175 in any three months) |
These increases follow the rise in the retail prices index of 8.9% from September 2022 to September 2023.
How the unfair dismissal limits work
An award for unfair dismissal usually has two main parts. The Employment Rights Act 1996 governs both.
Basic award: this is worked out from your age, your length of service and a week's pay. A week's pay is capped. The basic award is also limited by the overall cap shown in the table.
Compensatory award: this covers the loss you suffered because of the dismissal, such as lost earnings. It is limited to the lower of a fixed cap and a year's gross pay. See section 124 of the Employment Rights Act 1996.
The compensatory award is the one that most often matters. For many employees, a year's gross pay is lower than the statutory cap, so that lower figure applies.
When there is no statutory cap
The cap does not apply to every claim. In some cases, compensation is not limited in the same way:
Discrimination claims: awards under the Equality Act 2010 are not subject to a statutory cap.
Whistleblowing claims: compensation for dismissal because of a protected disclosure is not capped in the same way as ordinary unfair dismissal.
Injury to feelings: in discrimination claims, tribunals use the Vento bands to value injury to feelings. The bands are updated from time to time.
Other things that can change an award
Failure to follow the Acas Code: a tribunal can increase or reduce an award by up to 25% where a party unreasonably fails to follow the Acas Code of Practice.
Mitigation: you are expected to look for new work. Awards can be reduced if you do not take reasonable steps.
Contributory fault: an award can be reduced if your own conduct played a part in the dismissal.
Statutory pay increases in April
April also brings changes to other rates. These include the National Minimum Wage, statutory sick pay and statutory maternity pay. They also include paternity, adoption and shared parental pay. Employers should plan for the increases, especially if redundancies or dismissals are being considered.
Time limits for claims
Claims to an employment tribunal usually must be made within three months less one day from the date of the event. You must also contact Acas for early conciliation first. You can read more about the process on GOV.UK. Missing a deadline can end your claim, so take advice early.
Get legal advice
The rules on compensation can be complex. The right cap for your claim depends on the date of the event, your pay and the type of claim. If you need legal advice on an unfair dismissal claim or on a settlement, please get in touch with our employment team.
