Employment Tribunal: compensation increases and recent statistics

The Government has confirmed that employment tribunal compensation rates are to increase from 6 April 2021. From this date, the maximum week’s pay for redundancy pay purposes will increase from £538 to £544. However, statutory guarantee pay will stay the same at £30.

This means that the maximum statutory redundancy pay and unfair dismissal basic award pay will be £16,320. The unfair dismissal compensatory award will be a maximum of 52 weeks’ pay, subject to new maximum of £89,493. However, it should be noted that there are some unfair dismissal claims that are not subject to this maximum.

These figures apply where the effective date of termination is on or after 6 April 2021.

Turning to general tribunal statistics, the Ministry of Justice has released the figures for October to December 2020 which shows that, between this period, single claims increased by 25% compared to the same period in 2019. There was also an 82% increase in multiple claims, which are claims involving more than one employee.

Also in this quarter, the type of claims which have increased the most from the same time last year include age discrimination and failure to consult on TUPE. Claims for age discrimination in particular increased by a significant 176%. On another note, there has been a noticeable (46%) decrease of claims related to failure consult on redundancy, likely as a result of the extension of the furlough scheme until the end of April 2021 (now until the end of September 2021).

As usual, October to December 2020 saw a large number of claims submitted to the employment tribunal, over 14,000 claims, which remains a reflection on the removal of tribunal fees. The continued increase in the number of claims, and subsequent increase in backlog, can also be attributed to the pandemic and altered working conditions.

Once again, we are seeing a substantial number of discrimination claims being brought showing that employers are still failing to completely follow the legal obligations placed upon them in this area. To tackle this, employers can maintain an equality and diversity policy that outlines the steps the business will take to combat discrimination in the workplace.

The coronavirus pandemic continues to be a present concern for employers, who must ensure that they are legally compliant in their response to its impact. It is important to remember that employment law is not suspended due to the pandemic; now more than ever, employers need to get these key procedures right and avoid the risk of being taken to a tribunal. Crucially, all decisions to dismiss an employee must follow a fair process and be reasonable.

Furthermore, taking advice to settle a claim, whether through a settlement agreement or at the Early Conciliation stage, can reduce the financial risk of facing a tribunal and prevents the reputational risk of a tribunal judgment being published online.

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