The Government has announced this year’s annual increase to Employment Tribunal compensation limits for certain tribunal awards and other statutory payments, including statutory redundancy pay. The increased rates, which apply from 6 April 2025, reflect the increase in the retail prices index (RPI) of 2.7% on the previous year.
The key increases are a:
• limit on statutory week’s pay (used for calculating various awards, including statutory redundancy and unfair dismissal basic awards) increasing from £700 to £719.
• maximum compensatory award for unfair dismissal increasing from £115,115 to £118,223 (or a year’s gross pay, whichever is lower).
• minimum basic award for certain unfair dismissals (including health and safety dismissals) increasing from £8,533 to £8,763.
• the limit on the compensatory award for failure to have a written tips policy, or for failure to allocate and pay tips fairly, increases from £5,000 to £5,315.
What employers need to know
These increases apply where the event giving rise to the entitlement to compensation or other payment occurred on or after 6 April 2025. In cases involving unfair dismissal, the new figures will apply where the effective date of termination falls on or after 6 April 2025.
When the relevant event falls before 6 April 2025, the old limits will still apply, even when the compensation falls after that date.
As an employer, if you are facing potential Employment Tribunal claims, it is important to consider what effect these significant increases to compensatory awards may have on your business and your approach to managing employment issues.
