New rates applying to awards by employment tribunals and other payments under employment law are now being examined by parliament.

The draft Employment Rights (Increase of Limits) Order 2025, which applies to England, Wales and Scotland, is now before parliament, setting out the new statutory rates applying to certain awards of employment tribunals and other amounts payable under employment legislation.

Among the key changes are: the cap on a week’s pay for statutory redundancy pay calculations will increase from £700 to £719; the limit on compensatory awards for unfair dismissal will rise from £115,115 to £118,223; and statutory guarantee pay will increase from £38 to £39 per day.

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The £19 increase on the statutory cap on a week’s pay, for the purposes of calculating the basic award and statutory redundancy pay, means the unfair dismissal basic award in employment tribunal cases will increase, with the maximum now being £21,570 (ie, 20 x £719 x 1.5).

The minimum amount of compensation where an individual is excluded or expelled from a union in contravention of section 174 of the Trade Union and Labour Relations (Consolidation) Act 1992 and not admitted or re-admitted by date of the application for compensation will rise from £13,032 to £13,384.

The limit on amount of compensatory award for failure to have a written policy on dealing with qualifying tips, gratuities and service charges, or failure to create a record of how they have been dealt with (under the Employment Rights Act 1996) rises from £5,000 to £5,135.

The maximum award for unlawful inducement relating to trade union membership or activities or for unlawful inducement relating to collective bargaining will rise from £5,584 to £5,735.

The minimum amount of basic award of compensation where dismissal is unfair was raised from £8,533 to £8,763.

The new rates apply where the event giving rise to compensation or payment occurs on or after 6 April 2025. For example, in the case of unfair dismissal the rates apply to all dismissals where the effective date of termination falls on or after this date. Where the dismissal or relevant event falls before 6 April, the old limits will still apply, irrespective of the date on which compensation is awarded.

 

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