The annual increase in compensation limits for claims in the Employment Tribunal (effective from 1st February 2007) has been announced.

The Employment Rights (Increase of Limits) Order 2006 increases compensation in line with the increase in the Retail Price Index from September 2005 to September 2006.

The increases apply where the event giving rise to the entitlement to compensation (e.g. dismissal) or other payments occurs on or after 1st February 2007. The limits previously enforced are preserved by the Order in relation to cases where the relevant event was before that date.

In particular, the main changes are:

  • the limit on the compensatory award for unfair dismissal will increase from £58,400 to £60,000;
  • the maximum amount of a "week's pay" for the purposes of calculating the basic or additional award of compensation for unfair dismissal or redundancy payments will increase from £290 to £310.

A table of the increase of limits and a copy of the Order can be accessed by clicking here

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The original publication date for this article was 27/11/2006.