New tribunal compensation limits in force from April 2025

The government has recently announced that it will increase the following compensatory awards from 6 April 2025: 

• The limit on a week's pay will increase from £700 to £719. A week's pay is used to calculate statutory redundancy payments, the basic award in unfair dismissal claims and other awards
• The maximum compensatory award for unfair dismissal will increase from £115,115 to £118,223
• The minimum basic award for certain unfair dismissals (including health and safety dismissals) will increase from £8,533 to £8,763; and
• The limit on the compensatory award for a failure to have a written policy on allocating tips, or for a failure to allocate and pay tips fairly, will increase from £5,000 to £5,135.

These new rates take effect where the ‘appropriate date’ for the cause of action (such as the effective date of termination in an unfair dismissal claim) falls on or after 6 April 2025. Where the appropriate date falls before 6 April, the old limits will still apply, irrespective of the date on which compensation is awarded.

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