The annual increase in compensation limits has just been announced. The limits apply to dismissals (redundancies or detriments etc.) occurring on, or after 6th April 2017:
- £489.00 – the maximum amount of a week’s pay for calculating statutory redundancy pay, and the basic award; (up from £479.00)
- £14,670.00 – the maximum statutory redundancy payment or basic award, i.e. 30 weeks; and
- £80,541.00 – the maximum compensatory award which can be made for unfair dismissal (up from £78,962.00), or one year’s gross pay whichever is the lower
These increases mean that the maximum total unfair dismissal award is now £95,211.00, although uplifts can add a further 25%.
It is crucial to follow good practice in your HR procedures; considering carefully all dismissals, and ensure that the handling of appeals is conducted fairly and thoroughly. It is important to remember that there is no cap at all on the awards that can be made in many cases, including discrimination claims. Consequently, please seek advice from your HR Consultant, at the earliest opportunity, if you are considering terminating anyone’s employment, for whatever reason, and regardless of their length of service, so that they can ensure that you minimise any potential risks.
If you have started any redundancies, then you will need to update any calculations if the redundancy will take effect after 6th April 2017.
Employees may be entitled to receive guarantee payments for up to five days of lay-off, in any three-month period. The maximum amount of such a statutory guarantee payment will increase to £27.00 (from £26.00) for any one day.
The National Insurance employer threshold and employee threshold will be aligned from April 2017, meaning that both employees and employers will start paying National Insurance on earnings above £157.00 per week.
The personal allowance for tax will increase to £11,500 in April 2017, and will be £12,500 by 2020. The new threshold Upper Earnings Limit (UEL) for higher-rate tax will be £45,000.
Our Consultant would be pleased to answer questions on any of the above, or you can find much of the data on our website, by clicking on Frequently Asked Questions.
