Employment Tribunal Award Limits
Legislation setting the annual increase in Employment Tribunal Award Limits has been laid before Parliament.
The new rates will apply where the effective date of termination of an employee’s employment (or other calculation date) is on or after 6 April 2022.
A Week’s Pay
The maximum rate of a week’s pay, used for calculating statutory redundancy payments, the basic award for unfair dismissal and certain other tribunal awards, will increase to £571 (up from £544).
The Basic Award
The Basic Award is normally calculated according to the following formula:
- 5 week’s pay per complete year of continuous service under the age of 22;
- 0 week’s pay per complete year of continuous service between ages 22 and 40;
- 5 weeks’ pay per complete year of continuous service over the age of 41
- a) A “week’s pay” is calculated gross and is capped at the statutory maximum – currently £571 (from 6 April 2022)
- b) The maximum period of continuous service taken into account is 20 years
- c) The minimum period of continuous service required to qualify for a Basic Award is 2 years
- d) Continuous service is counted backwards from the date on which the employment terminated
The maximum compensatory award for unfair dismissal is set to increase to £93,878 (up from £89,493).
The cap on the compensatory award is the lower of £93,878 or 52 weeks’ pay (based on the claimant’s gross salary prior to the dismissal including employer pension contributions but excluding benefits-in-kind and discretionary bonuses).
Note that there is no statutory cap on compensation if an employee is dismissed for whistleblowing or for carrying out health and safety activities.
Vento Bands for Awards for Injury to Feelings
The Presidents of the Employment Tribunals in England & Wales and Scotland have issued joint Presidential Guidance updating the bands of awards for injury to feelings, known as the Vento bands.
In respect of claims presented on or after 6 April 2022, the Vento bands shall be as follows:
- a lower band of £990 to £9,900 (less serious cases);
- a middle band of £9,900 to £29,600 (cases that do not merit an award in the upper band); and
- an upper band of £29,600 to £49,300 (the most serious cases), with the most exceptional cases capable of exceeding £49,300.