From 1 February 2011, new rates will apply to compensation and other amounts payable in Employment Tribunals. The increased rates will apply where the effective date for the action occurs on or after 1 February. In unfair dismissal claims, for example, this will be the date of termination of employment.

The main changes include:

The limit on amount of the compensatory award for unfair dismissal will increase from £65,300 to £68,400.

The maximum amount of ‘a week’s pay’ for the purpose of calculating a redundancy payment or for various awards including the basic or additional award of compensation for unfair dismissal will increase from £380 to £400.

The maximum basic award for unfair dismissal, which is dependent upon the value of a week’s pay, age and length of service, will increase to £12,000.

The maximum total award for unfair dismissal will therefore be £80,400.

Full details of all of the changes can be found at:

http://www.legislation.gov.uk/uksi/2010/2926/schedules/made/data.pdf

Other Proposed changes

The Government is currently considering increasing the qualifying period for Unfair Dismissal claims from one year to two.

The change is being proposed in line with the Department for Business Innovation and Skills (BIS) Report ‘Backing Small Business’ which explores the necessary changes for supporting small businesses. It is intended that the extension would allow small businesses more freedom and encourage more jobs to be offered by employers.

No new primary legislation would be required to implement the increase and it would only affect ‘ordinary’ claims. For claims of discrimination, whistle blowing and others exempt from the qualifying period, the position would remain the same.

Other changes are being discussed which aim to maximize flexibility for employers and employees within a competitive environment for business. These include proposals to charge a fee of around £250 to bring a claim in the Employment Tribunal. It is thought that this would assist in reducing the number of vexatious claims being raised. Reductions to the length of time employers are required to pay statutory sick pay are also thought to be being considered.

A full consultation document is due to be published shortly.

Further information

For further information on the issues raised in this ezine, please contact Alun Thomas, Murray McCall, or Alan Masson, or your usual contact within the Employment team.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.