Are you ready for increases in compensation limits and statutory payments?
A number of statutory payments will increase in April 2023. We have set out below the key changes that employers should be aware of.
Unfair dismissal compensation increase
The limits on compensation for certain tribunal awards will increase where the effective date of termination of employment falls on or after 6 April 2023. These include:
- The limit on a week’s pay increases to £643 (up from £571).
- The maximum basic award increases to £19,290 (up from £17,130).
- The maximum compensatory award for unfair dismissal (statutory cap) increases to £105,707 (up from £93,878).
It is worth remembering that the statutory cap on the compensatory award does not apply where the reason for the dismissal was that the claimant:
- Was carrying out health and safety activities.
- Had made a protected disclosure.
- Was selected for redundancy for one of the above reasons.
Mandatory awards increase
An employer must not make any offer to an employee to induce them to give up (or take up) union membership, or to give up union activities, services or collective bargaining. An employment tribunal must make a mandatory award where a claim is upheld. With effect from April 2023, the mandatory award increases to £5,128 (up from £4,554).
An example of how the mandatory award applies in practice is set out in our separate post on the case of Kostal UK Ltd v Dunkley and others here
Statutory Redundancy Payments increase
Employees with at least 2 years’ service are entitled to statutory redundancy pay (SRP) in the event of dismissal by reason of redundancy.
The calculation of SRP is affected by the limit on a week’s pay, which increases to £643. This means that the maximum SRP for dismissals with effect from 6 April 2023 increases to £19,290 (up from £17,130).
National Minimum Wage increase
With effect from 1 April 2023 the National Minimum Wage (NMW) and National Living Wage (NLW) will increase as follows:
- NLW for those over 23 – £10.42 (up from £9.50).
- NMW for those aged 21 to 22 – £10.18 (up from £9.18).
- NMW for those aged 18 to 20 – £7.49 (up from £6.83).
- NMW for those aged under 18 – £5.28 (up from £4.81).
- Apprentice Rate – £5.28 (up from £4.81).
Other Statutory payments increase
The following increases will also apply from April 2023:
- The weekly rate of Statutory Sick Pay will be £109.40 (up from £99.35)
- The weekly rate of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay, Statutory Adoption Pay and Statutory Parental Bereavement Pay (SPBP) will be £172.48 (up from £156.66)
16 March 2023
If you would like to receive monthly employment law updates and news of our events, sign up for our email alerts.
©2023 SCRASE LAW LTD. THIS POST IS FOR GENERAL INFORMATION ONLY AND IS NOT ADVICE. YOU ARE RECOMMENDED TO SEEK PROFESSIONAL ADVICE BEFORE TAKING ANY ACTION ON THE BASIS OF THIS POST