New limits announced for unfair dismissal and redundancy payments

In an Order made by the Department for the Economy, payments and awards made to workers in employment rights cases are to rise in line with inflation with effect from 6 April 2019.

New limits announced for unfair dismissal and redundancy payments

The increased limits relate to a range of employment rights including:

• statutory redundancy payments;
• the basic and compensatory awards for unfair dismissal;
• the limit on guarantee payments made when employees are not provided with work; and
• the minimum basic award for unfair dismissal in health and safety and certain other cases.

Under the Order the limit on the compensatory award for unfair dismissal rises from £83,847 to £86,614 while the maximum amount of ‘a week’s pay’ for the purpose of calculating redundancy payment rises from £530 to £547.

Legislation adjusting limits relating to a range of employment rights is made annually to reflect changes in the rate of inflation as measured by the Retail Prices Index (RPI).

Notes to editors: 

1. Article 33 of the Employment Relations (Northern Ireland) Order 1999 provides that the limits on various awards and payments under employment legislation will be index-linked, i.e. will be varied by Order if the Retail Prices Index (RPI) for September of a year is higher or lower than the index of the previous September.

2. The new limits reflect changes in the RPI between September 2017 and September 2018 (3.3% - source: ONS, all items RPI).

3. The Department for the Economy is legally required to make the up-rating Order and to bring the new limits into operation on 6 April 2019. The changes being made involve no changes to the structure of awards and other payments, or to employers’ management systems.

4. Amendments contained within the Enterprise and Regulatory Reform Act 2013 made limits applicable in Great Britain subject to increase on a fixed date (6 April annually) and a different method of rounding.  Corresponding amendments in respect of Northern Ireland, contained within section 22 of the Employment Act (Northern Ireland) 2016 (“the 2016 Act”), were commenced in 2018.  Consequently limits in Northern Ireland have diverged slightly from those applicable in GB.  Section 22 of the 2016 Act also contains an amending provision that will allow this divergence to be addressed, if there is agreement to do so, in the future.

5. The Order, which contains a table showing the increase in limits from 6 April 2019, will be available to view online at legislation.gov.uk  .  

6. Printed copies of the Rule may be purchased from The Stationery Office (TSO) at http://www.tsoshop.co.uk or by contacting TSO Customer Services on 0333 202 5070.

7. All media queries should be directed to the Department for the Economy Press Office on 028 9052 9604.  Out of office hours contact the duty press officer on 028 9037 8110.

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