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 2026.

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 £751 (up from £719).

The Basic Award

The Basic Award is normally calculated according to the following formula:

Age-Based Entitlement:

• 0.5 week’s pay per complete year of continuous service under the age of 22;
• 1 week’s pay per complete year of continuous service between ages 22 and 40;
• 1.5 weeks’ pay per complete year of continuous service over the age of 41

• average earnings are calculated over the 12 weeks before the date of termination.
• A “week’s pay” is calculated gross and is capped at the statutory maximum – £751 (from 6 April 2026).
• The maximum period of continuous service taken into account is 20 years.
• The minimum period of continuous service required to qualify for a Basic Award is 2 years.
• Continuous service is counted backwards from the date on which the employment terminated.

The maximum cap will now be £22,530 (increased from £21,570).

You can use the official GOV.UK redundancy pay calculator to check entitlements.

Compensatory Award

The maximum compensatory award for unfair dismissal is set to increase to £123,543.

The cap on the compensatory award is the lower of £123,543 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).

This limit applies until 31 December 2026, as the cap is scheduled to be removed entirely for dismissals taking place on or after 1 January 2027.

Vento Bands for Awards for Injury to Feelings

An award for injury to feelings is made to compensate for injury to feelings caused by discrimination. The award is separate from an award to compensate for financial loss and can be made even where no financial loss has been suffered. Awards for injury to feelings are assessed in bands, known as the Vento bands.

For claims presented on or after 6 April 2025 the bands are as follows:

• Lower band of £1,200 to £12,000 (previously £11,700) (less serious cases);
• Middle band of £12,000 to £36,400 (previously £35,200) (cases that do not merit an award in the upper band); and
• Upper band of £35,200 to £60,000 (previously £58,700) (the most serious cases).

Awards of more than £60,000 will be made but only in the most exceptional of cases.

Notes for 2026-27
Uncapped Claims: Under the Employment Rights Act 2025, the cap on unfair dismissal compensation will be removed entirely from 1 January 2027, allowing tribunals to award higher amounts based on actual loss.
Collective Consultation: Failure to collectively consult regarding redundancy will see the maximum protective award rise to 180 days’ pay for dismissals on or after 6 April 2026.
Discrimination: If unfair dismissal is combined with discrimination, compensation for injury to feelings (Vento bands) is unlimited

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