Employers beware: Increases to compensation awards and other statutory rates from April 2019

Compensation limits for certain tribunal awards and statutory payments have increased from April 2019. Find out how these new increases will impact on your organisation.

Compensation increases from 6 April 2019

Employment Tribunal awards for successful claims involving dismissal (e.g. unfair dismissal) have increased from 6 April. The increased limits will apply where the Effective Date of Termination (EDT) falls on or after 6 April 2019. 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 are:

• The maximum cap on the compensatory award for unfair dismissal - this has increased to £86,444 from £83,682 (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 has increased to £6,408 from £6,203.
• The maximum statutory cap on a week’s pay (relevant when calculating statutory redundancy and basic awards) - this has increased to £525 from £508.

Compensation for breach of contract claims, such as awards for wrongful dismissal, remain capped at £25,000, if brought in the Employment Tribunal. 

Higher statutory rates 

Family-related leave

From 1 April 2019 the “prescribed rate” (set by the Government each year) has increased to £148.68 per week for:

• maternity 
• paternity 
• adoption; and 
• shared parental pay (ShPP). 

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 ShPP 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

Previous rates have increased from 1 April 2019, as set out below:

Age/Position	25 and over	21-24	18-20	Under 18	Apprentice
Previous figure	£7.83	£7.38	£5.90	£4.20	£3.70
From 1 April 2019	£8.21	£7.70	£6.15	£4.35	£3.90

 
Sick pay

From 1 April 2019, statutory sick pay has increased to £94.25 from £92.05 per week. Employees that have been absent from work for 4 consecutive days or more are entitled to a weekly statutory sick payment for up to 28 weeks. 
Remember to notify your payroll department to ensure those rates are increased as necessary.

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.