Update: the annual increase in tribunal limits according to the Employment Rights (Increase of Limits) Order 2023

The Employment Rights (Increase of Limits) Order 2023 has brought in a new wave of increases to the Employment Tribunal limits.

This annual increase in tribunal limits is an important development for both employers and employees in England & Wales as it affects the maximum amounts of compensation that can be awarded by employment tribunals.

The Employment Rights (Increase of Limits) Order 2023 sets out the new limits for the period from 6 April 2023 to 5 April 2024. The increases are based on the September 2022 retail price index (RPI), which increased by 12.6% since the previous year. The new figures are therefore the highest increases for several years. The key changes to the limits are as follows:

• The maximum compensatory award for unfair dismissal will increase from £93,878 to £105,707. This means that an employee who has been unfairly dismissed could potentially receive up to £105,707 in compensation.
• The maximum amount of a week’s pay, which is used to calculate redundancy pay and the basic award for unfair dismissal, will increase from £571 to £643. This means that the maximum basic award for unfair dismissal and the maximum statutory redundancy payment will increase from £17,130 to £19,290.

These changes are important for employers to be aware of as they may need to adjust their practices and policies to ensure compliance with the new limits. Employers may also need to consider the potential costs of defending claims in the employment tribunal, particularly if the maximum amounts of compensation have increased.

Employees will also benefit from the new limits as they may be able to receive more compensation if they are successful in bringing a claim in the employment tribunal. This could act as a deterrent for employers who may be tempted to breach employment laws, as the potential financial costs of doing so have increased.

Overall, the annual increase in tribunal limits is an important development for both employers and employees in the UK. The new limits set out in the Employment Rights (Increase of Limits) Order 2023 will come into effect from 6 April 2023, and both employers and employees should ensure that they are aware of these changes and the potential impact on their businesses and rights.

Further reading

Employment Law and HR package – Oakwood Solicitors

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