The value of a number of employment claims, including statutory redundancy pay, are calculated by reference to an employee’s weekly pay. This weekly pay is itself subject to a cap of a prescribed amount.
From 6 April 2021, the prescribed cap on weekly pay will increase to £544. Consequently, statutory redundancy pay will increase, with the maximum payment increasing to £16,320.
Compensation for unfair dismissal
Compensation for unfair dismissal claims is split into a “basic” award and a “compensatory” award. The basic award is calculated in the same way as statutory redundancy pay and will, therefore, increase as described above.
The compensatory award is calculated by reference to the claimant’s loss of earnings, subject to a statutory cap. The cap on the compensatory award for ordinary unfair dismissal claims will increase as of 6 April 2021 to £89,493 (or 52 weeks’ gross actual pay, if lower). These new figures will apply where the effective date of termination falls on or after 6 April 2021.