Readers may recollect a few years ago the government announcing that any changes to employment legislation would take effect in April and October of each year. The objective was to allow some
Readers may recollect a few years ago the government announcing that any changes to employment legislation would take effect in April and October of each year. The objective was to allow some certainty in terms of planning. Well, for the second year running, increases in the compensation limits and minimum awards that apply to a range of employment claims will take effect in April.
While April may seem a long way off, knowing now what those changes are may be relevant to decisions that need to be made over the next couple of months in respect of redundancies and other dismissals.
The increases are in line with the RPI measure of inflation as at September 2014. This means that the maximum amount of a week's pay for calculating a redundancy payment and various other awards, including the basic award for unfair dismissal, will increase from £464 to £475. Therefore, if an employee aged between 61 and 64 with 20 or more years of continuous employment earning at least £475 per week has their employment terminated by reason of redundancy on or after 6 April 2015, they will be entitled to a statutory redundancy payment of £14,250.
In the case of unfair dismissal, the maximum award for compensation will increase from £76,574 to £78,335. This increase will only apply to dismissals where the termination date is on or after 6 April 2015. By way of reminder, if an employee's annual gross salary is less than £78,335, then their compensation will be capped at their annual salary.
Finally, the minimum basic award increases from £5,676 to £5,807 in cases where the principal reason for dismissal was due to the employee refusing to comply with a requirement that would be a contravention of the Working Time Regulations 1998, or because they refused to forgo a right under those Regulations. This minimum basic award extends to dismissals that relate to representative functions under those Regulations, as well as to cases where the principal reason for dismissal is due to the employee being a trade union representatives or trustee under an occupational pension scheme as defined in the Pension Schemes Act 1993.
While April may seem a long way off, knowing now what those changes are may be relevant to decisions that need to be made over the next couple of months in respect of redundancies and other dismissals.
The increases are in line with the RPI measure of inflation as at September 2014. This means that the maximum amount of a week's pay for calculating a redundancy payment and various other awards, including the basic award for unfair dismissal, will increase from £464 to £475. Therefore, if an employee aged between 61 and 64 with 20 or more years of continuous employment earning at least £475 per week has their employment terminated by reason of redundancy on or after 6 April 2015, they will be entitled to a statutory redundancy payment of £14,250.
In the case of unfair dismissal, the maximum award for compensation will increase from £76,574 to £78,335. This increase will only apply to dismissals where the termination date is on or after 6 April 2015. By way of reminder, if an employee's annual gross salary is less than £78,335, then their compensation will be capped at their annual salary.
Finally, the minimum basic award increases from £5,676 to £5,807 in cases where the principal reason for dismissal was due to the employee refusing to comply with a requirement that would be a contravention of the Working Time Regulations 1998, or because they refused to forgo a right under those Regulations. This minimum basic award extends to dismissals that relate to representative functions under those Regulations, as well as to cases where the principal reason for dismissal is due to the employee being a trade union representatives or trustee under an occupational pension scheme as defined in the Pension Schemes Act 1993.