Compensation Rates Increased

Compensation Rates Increased

Introduction

Compensation Rates Increased. The Government have now announced that it will increase the maximum amount of a “week’s pay” from £544 to £571 from 6 April 2022.

Background

A “week’s pay” is used to calculate statutory redundancy payments, payments to employees in the event of insolvency and various awards including the unfair dismissal basic and additional awards.  The above-mentioned increase means the maximum basic award for unfair dismissal and statutory redundancy pay (30 weeks’ pay, subject to the limit on a weeks’ pay) will increase from £16,320 to £17,130.

Further Information

Other key increases are:

• the maximum compensatory award for unfair dismissal will rise from £89,483 to £93,878 (there is an additional cap of one year’s salary on the unfair dismissal compensatory award, whichever is the lesser).
• the minimum basic award for certain unfair dismissals, such as dismissals for reasons of trade union membership or activities, health and safety duties or acting as an employee representative or workforce representative, will go up from £6634 to £6959.
• the maximum award for unlawful inducement relating to trade union membership or activities, or collective bargaining, will increase to £4554, and
• the minimum compensation for employees excluded/expelled from trade union will go from £10132 up to £10628

Finally, the limit on the daily amount of statutory guarantee pay, which is used to pay employees for the first 5 workless days if you lay them off work will increase to £31 per day.

Actions

• The new limits will apply to dismissals occurring on or after 6th April 2022. Therefore, if you have any redundancies on the horizon you may want to ensure where possible these dismissals (including consultation and notice) are completed before the 6^th April 2022, after which it may become more expensive.

For further guidance on all other statutory rate changes from April 2022, please visit www.yourhr.guide.

For further general HR guidance and information, and HR templates, please visit www.yourhr.guide.

Fiona Haworth

You can contact Fiona on [email protected]

If you feel that you need guidance or advice on this matter, please call Practical HR on 01702 216573 or email Fiona on the above.