Background

The Employment Rights (Increase of Limits) Order 2026 raises compensation limits for certain tribunal awards, including unfair dismissal claims, while the Social Security Benefits Up-rating Order 2026 increases statutory payments such as maternity pay and sick pay. These adjustments are part of the government's annual review process, designed to align statutory entitlements with inflation and economic conditions.

The key changes to employment tribunal payments include:

• Limit on a week's pay: Increased from 719 to 751.
• Maximum compensatory award for unfair dismissal: Increased from 118,223 to 123,543.
• Minimum basic award for certain unfair dismissals (e.g., health and safety dismissals): Increased from 8,763 to 9,157.
• Compensatory award for failure to have a written tips policy or failure to allocate and pay tips fairly: Increased from 5,135 to 5,366.

Statutory payments will increase as follows:

• Statutory maternity pay and maternity allowance: Increased from 187.18 to 194.32.
• Statutory paternity, adoption, shared parental, parental bereavement, and neonatal care pay: Increased from 187.18 to 194.32.
• Statutory sick pay: Increased from 118.75 to 123.25.

Learning points for employers

The changes to employment tribunal payments will apply to cases where the effective date of termination falls on or after 6 April 2026. With the exception of statutory maternity pay which will take effect on 5 April 2026, all other payments will be effective from 6 April...

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