New compensation limits from 6 April 2025
As the seasons change, so do certain employment compensation limits and rates. We have set out in this update the key increases.
Tribunal compensation
As mentioned at the firm's recent annual employment seminar, from 6 April 2025:
- the maximum compensatory award for unfair dismissal will be the lower of twelve months' salary or £118,223 (up from £115,115);
- the limit on a week’s pay for the purposes of calculating statutory redundancy payments and basic awards for unfair dismissal will be £719 (up from £700);
- consequently, the maximum basic award for unfair dismissal and the maximum amount for statutory redundancy pay, both of which are calculated on a formula based on the employee's age, length of service and weekly pay, will be £21,570 (up from £21,000).
The new rates will apply where an individual's effective date of termination of employment falls on or after 6 April 2025.
Vento bands
Vento bands are the bands of compensation that Employment Tribunals can award for injury to feelings (for example, in discrimination and whistleblowing cases). The new Vento bands have been published, and the following will apply when assessing an injury to feelings award in respect of a successful claim for discrimination or whistleblowing that was presented on or after 6 April 2025:
- Lower band (for less serious cases): £1,200 to £12,100
- Middle band (for cases that do not merit an award in the upper band): £12,100 to £36,400
- Upper band (for the most serious cases): £36,400 to £60,700
Awards in the most exceptional cases are capable of exceeding £60,700.
If you have any queries on this or any other employment law matter, please contact Imogen Heywood-Lee, Leanne Raven or your usual Stephenson Harwood contact.