Annual Increase in Tribunal Compensation - from 1st February 2005

The annual increase in compensation limits for claims in the Employment Tribunal, effective from 1 February 2005, has been announced. The increases apply where the event giving rise to the entitlement to compensation (e.g. dismissal) or other payments occurs on or after 1 February 2005.

The main changes are:

1. the limit on the compensatory award for unfair dismissal will increase from £55,000 to £56,800; and
2. the maximum amount of “a week’s pay” for the purposes of calculating compensation will increase from £270 to £280.

The limits apply to both statutory redundancy payments and basic awards in employment tribunals. There are other less common uses for this limit on ‘week’s pay’ such as the award against an employer who unreasonably refuses a reasonable request to be accompanied at a disciplinary or grievance meeting.

[update 2020 the above is historical information only - the figures have gone up every year since and are now £88,519 and £538]