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Employers beware: Increases to compensation awards and other statutory rates from April 2018
06 March 2018

Compensation limits for certain tribunal awards and statutory payments will increase from April 2018. Find out how these new increases will impact on your organisation.

Compensation increases from 6 April 2018 

Employment Tribunal awards for successful claims involving dismissal (e.g. unfair dismissal) will increase on 6 April. The increased limits will apply where the Effective Date of Termination (EDT) falls on or after 6 April 2018. The EDT is either the date on which the employee’s notice expire or the date on which the termination takes effect e.g. a summary dismissal where the employee is dismissed without notice.  

Key increases on current statutory limits are:

  • The maximum cap on the compensatory award for unfair dismissal - this will increase to £83,682 from £80,541 (or a year’s pay, whichever is lower).
  • The minimum basic award for certain unfair dismissals relating to health and safety, employee representative, trade union and occupational pension trustee reasons - this will increase from £5,970 to £6,203.
  • The maximum statutory cap on a week’s pay (relevant in particular when calculating statutory redundancy and basic awards) - this will increase to £508 from £489. 

We will also see compensation limits increase for guarantee payments from £27 to £28 per day. Compensation for breach of contract, such as awards for wrongful dismissal, will remain capped at £25,000, if brought in the Employment Tribunal. 

Higher statutory rates 

Family-related leave

From 1 April 2018 the “prescribed rate” (set by the Government each year) will increase to £145.18 per week for:

  • maternity 
  • paternity 
  • adoption; and 
  • shared parental pay. 

For the first 6 weeks of maternity and adoption pay, payments are made by the employer at 90% of the employee’s normal weekly earnings i.e. the “earnings-related rate”. For the remaining 33 weeks, employers must pay either the “prescribed rate” or the “earnings-related rate”, whichever is lower. Paternity pay must be paid by employers for at least 2 weeks at the “prescribed rate” (as above) or the “earnings-related rate”, whichever is lower. 

Parents seeking to take shared parental leave are entitled to 39 weeks of ShPP less any weeks spent by the child’s mother or adopter in receipt of Statutory Maternity or Adoption pay. As above, ShPP must be paid at the “prescribed rate” or the “earnings-related rate”, whichever is lower.  

National minimum wage

Current rates will increase from 1 April 2018, as set out below:


25 and over  21 to 24   18 to 20  Under 18 


Current figure

£7.50 £7.05 £5.60 £4.05


From 01 April 2018

£7.83 £7.38 £5.90 £4.20



Sick pay 

From 1 April 2018, Statutory sick pay will increase to £92.05 from £89.35 per week. Employees that have been absent from work for 4 consecutive days or more are entitled to a weekly SSP for up to 28 weeks. 

Remember to notify your payroll department to ensure those rates are increased as necessary.

More on the horizon for employers in 2018…

More changes affecting employers are scheduled throughout this year. Employers should keep a timeline of these changes and prepare accordingly. For an overview of the key changes, please take a look at "What's coming up in employment law in 2018".

We can help with Gender pay gap reporting!

If you are an employer with 250+ employees that is affected by Gender pay gap reporting, with a report due on 4 April 2018, we can prepare your Gender pay gap report for you. Please contact Claire Taylor-Evans at [email protected] or the Employment team on 0118 952 7284 or for further information. 

Are you GDPR ready?

As a final aside, we can also help you get GDPR ready – be it in relation to employment-related data or commercial client information.  This is how:

  • Training and awareness – we are training clients and wider employee populations on the implications of GDPR. Be it face to face update sessions or eLearning modules, we have the training to suit you. There are potential directors liabilities being introduced under the Data Protection Bill so there is a real need for Boards to know about these changes.
  • Contracts, policies and Privacy Notices – we have produced an Employment Data Protection Toolkit with a suite of GDPR ready documents. Sounds simple…it is! For information about our Toolkit, email us.
  • Third party processors – we are negotiating terms with third party processors to ensure they are compliant.  Can we do this for your organisation?  
  • Risk analysis and data audits – let us find out where your data protection risks are.
  • Ad hoc support and advice – let us answer your GDPR questions.  

If you would like to discuss any of the above in more detail or how we may help you, please do not hesitate to contact the Employment team on 0118 952 7284.

A full list of our training events, conferences and webinars can be found here

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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