Under the Employment Rights (Increase of Limits) Order 2025 (the “Employment Order”), there will be changes to the compensation limits that apply to certain awards that Employment Tribunals can make and other amounts payable under employment legislation with effect from 6 April 2025. The Employment Order applies to England, Wales and Scotland.

The new limits will apply where the ‘appropriate date’ for the cause of action occurs on or after 6 April 2025. For example, in the case of unfair dismissal, the rates apply to all dismissals where the effective date of termination falls on or after this date. If the appropriate date (e.g., the date of dismissal) falls before 6 April 2025, the previous limits mentioned below will apply irrespective of the date on which the compensation is awarded.

Here is a brief overview of the changes which will take effect from 6 April 2025 under the Employment Order:

• the maximum compensatory award for unfair dismissal is increasing from 115,115 to 118,223 (the upper limit remains the lower of a year’s salary or the maximum statutory limit of 118,223);
• the maximum amount of a ‘week’s pay’ (for the purpose of calculating statutory redundancy payments and the basic award for unfair dismissal) is increasing from 700 to 719;
• the limit on the compensatory award for failure to allocate and pay tips fairly is increasing from 5,000 to 5,135;
• guarantee daily pay is increasing from 38 to 39; and
• the minimum basic award in cases where a dismissal is unfair...

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