The Employment Rights (Increase of Limits) Order 2022
What is it & how does it affect you?
The Employment Rights (Increase of Limits) Order 2022 provides the increased upper limits effective 6th April 2022 which employment tribunals utilise.
Each year these limits are reviewed and updated in line with the retail prices index (RPI).
Increases are stipulated below:-
• Statutory guarantee pay paid during a period of lay off by the employer increasing from £30 to £31
• limit on a week’s pay for calculating redundancy and the unfair dismissal basic award increasing from £544 to £571 (proportionally higher increase than previous years)
• increase to a week’s pay resulting in the maximum basic award for statutory redundancy payment and unfair dismissal at £17,130, increased from £16,320
• maximum compensatory award for unfair dismissal increased to
£93,878 or a year’s pay, whichever is lower.
The above changes mean that the most an employment tribunal could award for an unfair dismissal in relation to the maximum basic and compensatory award, has increased to £111,008.
The new limits relating to dismissal compensation will apply for any dismissals where the effective date of termination is on, or after, the 6 April 2022.
Please note, any dismissals arising prior to this date (up to an including 5th April, 2022) will have the previous compensation limits applied to any award.
There are unlimited compensation awards for discrimination, therefore, dismissals where discrimination applies under the Equality Act 2010 could lead to a higher financial award than stipulated within this article.
Given there is no financial barrier to employees or ex-employees wishing to make a tribunal claim, and the above figures shows that pay outs for claims are increasing.
The annual increase to tribunal awards, along with other factors such as reputational damage and increases to the cost of living (which may encourage employees who would not have previously contemplated a claim, to do so), means it has never been more important to follow correct procedures to avoid being taken to tribunal.
With regards to dismissals, this means they will need to ensure they have a fair reason to dismiss, are following a fair procedure and are acting reasonably in all the circumstances.
Experts, ELHR Ltd. are happy to assess if your company is compliant – fill in our contact form for a free initial consultation should you require further assistance. Please call us now on 01788 432077 for an initial free consultation.
ELHR Ltd. are Employment Lawyers & Human Resources Consultants. We’re experts who can help you to keep up to date with legislative changes, apply statute and the latest case law precedents to your business. We limit the risk of litigation & help you & your business with best practice to ensure you gain the best you can from your team.
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