With effect from 6 April 2023, the Government has announced this year that the statutory cap on a week’s pay will increase from £571 to £643.
This is relevant to the calculation of an employee’s entitlement to a statutory redundancy payment, and is therefore important for employers to bear in mind when considering their liability in respect of dismissals by reason of redundancy.
This increase is relevant not only to redundancy scenarios, but also in respect of the calculation of an employee’s entitlement to a basic award in any claim for unfair dismissal.
The statutory cap on the compensatory award for unfair dismissal will also rise sharply from £93,878 to £105,707 as of 6 April 2023, which is also a significant increase, and a reflection of the current high rate of inflation.
This means that any successful claim for ordinary unfair dismissal brought by an employee, for example in respect of unfair selection for redundancy or for dismissals relating to an employee’s misconduct or poor performance could attract compensation of:-
- A basic award of up to £19,000 depending on their age and length of service; plus
- A compensatory award of up to £105,707.
The prescribed rates in relation to statutory maternity, adoption, paternity and shared parental pay will also increase from £156.66 to £172.48 per week, and in respect of Statutory Sick Pay from £99.35 per week to £109.40 per week.
If you would like further advice about this, please do not hesitate to contact the employment team at firstname.lastname@example.org.
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