RPI-linked compensation limits to fall in 2010
The Government has published the Employment Rights
(Revision of Limits) Order 2009, containing revised tribunal
compensation limits applicable where the relevant calculation date falls
on or after 1 February 2010. For the first time, Retail Price Index
linked limits have decreased, reflecting the drop of 1.4%.
Under the Employment
Rights (Revision of Limits) Order 2009 SI 2009/3274, RPI-linked
compensation limits are set to fall, reflecting a decrease of 1.4% in
the Retail Prices Index (RPI) from September 2008 to September 2009. The
key amendments are as follows: (i) the maximum compensatory award for
unfair dismissal falls from £66,200 to £65,300; (ii) the maximum
guarantee payment payable to an employee in respect of any day under
S.31(1) of the Employment Rights Act 1996 (where the employee would
normally work, but no work is provided) falls from £21.50 to £21.20.
The new limits apply when the event giving rise to the entitlement to
compensation, or other payment, occurs on or after 1 February 2010.
Note, however, that the economic downturn had the reverse effect for the
limit on a week’s pay used to calculate, among other things, redundancy
payments and the unfair dismissal basic award. In October 2009 the RPI
formula was suspended for all weekly limit calculations to allow a
one-off increase from £350 per week to £380, which will remain in force
until February 2011 at the earliest.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
