The government has published details of the annual increases in the amount payable to employees on redundancy and the amount of compensation which Employment Tribunals may award for unfair dismissal claims. These changes will take effect from 6 April 2015.
These changes will see the maximum amount of a weeks' pay for calculating redundancy pay rise to £475 from the current £464. For dismissals that take effect on or after 6 April 2015, the maximum amount of a weeks' pay for calculating the basic award of compensation for unfair dismissal will also rise to £475. This uplift is in line with the Retail Price Index (RPI) measure of inflation as of September 2014, which was at 2.3%. The payments are designed to compensate successful claimants for loss of job security and earnings, including lost salary, pension and other benefits.
The increases mean that the maximum payment an employee will be able to receive as a statutory redundancy payment will be £14,250. For unfair dismissal, compensation payments will be capped at an increased figure of £78,335 compared to the current £76,574.
Employers are therefore encouraged to ensure that their payroll systems are updated to reflect the above maximum week's pay rate in readiness for any calculations for statutory redundancy pay on or after 6 April 2015.