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Wednesday, 27 March 2019 11:55

Uplift in Redundancy Pay limits April 2019

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As April fast approaches, employers should make sure they are ready to implement the increases to the calculation of redundancy payments, as well as some other important statutory changes which will come into effect next month.

Statutory cap on redundancy pay

With effect from 6 April 2019, the statutory cap on a week’s pay (which is used for redundancy calculations as well as certain employment tribunal awards) will increase to £525. The maximum statutory redundancy pay will increase to £15,750.

Tribunal awards

  • The maximum compensatory award for unfair dismissal increases from £83,682 to £86,444. The upper limit remains the lower of a year’s salary or the maximum statutory limit.
  • The limit on the daily amount of guarantee payments increases from £28 to £29 per day.
  • The minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons increases from £6,203 to £6,408.

The bands of awards for injury to feelings in discrimination cases, known as the Vento bands, will also be updated from April 2019. These figures have yet to be released.

The new rates apply where the event giving rise to compensation or payment occurs on or after 6 April 2019. For example, in the case of unfair dismissal the rates apply to all dismissals where the effective date of termination falls on or after this date. Where the dismissal or relevant event falls before 6 April, the old limits will still apply, irrespective of the date on which compensation is awarded.

Changes to itemised pay statements

With effect from 6 April 2019, the right to an itemised pay statement will be extended to workers (not just employees). Employers should ensure that any workers they engage receive pay statements (as their employees currently do) for pay periods beginning on or after 6 April.

Additionally, for pay periods beginning on or after 6 April, pay statements provided to employees and workers whose pay varies based on the hours worked will need to show the number of hours paid at the variable rate. This will apply not only to hourly paid employees and workers but also to those who receive fixed pay with a variable rate applied to any overtime. In this case, the pay statement will need to show the number of hours of overtime worked.

Whatever happens with Brexit these changes will go through.

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