The Employment Rights (Increase of Limits) Order 2025 (“the Order”) came into effect on 6 April 2025, raising the compensation limits and minimum awards that employment tribunals can make under various employment laws.
It’s important for employers and employees alike to be aware of these updated figures, as they impact compensation for unfair dismissal, redundancy, tip allocation disputes, guarantee pay, and minimum awards related to certain types of unfair dismissal. The key increases include:
- The compensatory award limit for unfair dismissal has risen from £115,115 to £118,223.
- The maximum week’s pay for calculating statutory redundancy payments and the basic award for unfair dismissal has increased from £700 to £719.
- The compensatory award limit for failure to allocate and pay tips fairly is now £5,135, up from £5,000.
- Guarantee pay for laid-off employees has increased from £38 to £39 per day.
- The minimum basic award for unfair dismissal relating to health and safety, working time, employee representatives, trade unions, or occupational pension trustees has risen from £8,533 to £8,763.
It’s worth noting that these new limits apply only where the relevant ‘appropriate date’—such as the effective date of dismissal—is on or after 6 April 2025. If the date falls before this, the previous limits still apply regardless of when compensation is actually awarded.
In addition, the Social Security Benefits Up-rating Order 2025 has increased statutory leave payments, including statutory maternity, paternity, and shared parental pay. These payments have gone up from £184.03 to £187.18 per week or 90% of the employee’s average weekly earnings, whichever is lower.
Statutory sick pay has also increased, rising from £116.75 to £118.75 per week from 6 April 2025.
For both employers and employees, staying up to date with these changes is crucial to ensure compliance and fair treatment in the workplace.
If you have any questions about how these changes might affect you or your business, please get in touch for tailored advice from our highly regarded and friendly Employment Law team.
