Partner, Sue Dowling, in our Employment Law team, summarises important recent changes in levels of pay/compensation that will potentially affect employers and their employees.
Statutory Redundancy Pay
The cap on the value of a week’s gross pay (which is used to calculate Statutory Redundancy Pay for employees earning above that amount (and also Basic Awards for compensation for Unfair Dismissal) increased from 6 April 2025, from £700 per week to £719 per week. This, in turn, means that the overall maximum Statutory Redundancy Pay for an employee who has completed 20 (or more) years of service, all having being worked when they were 41 or older, will increase from £21,000.00 to £21,570.00.
Compensation for Unfair Dismissal in the Employment Tribunals
Employment Tribunal compensation rates also changed from 6 April 2025.
A successful Claimant’s Basic Award is calculated in the same way as Statutory Redundancy Pay (see above).
Where a Claimant is judged to have been unfairly dismissed, they are entitled to a compensatory award (of such amount as a Tribunal considers is ‘just and equitable’ with reference to the losses suffered) subject to an overall maximum of 52 actual weeks’ pay or the statutory cap, whichever sum is the smaller (subject to limited exceptions where the cap is ‘lifted’). That capped compensatory award rises from £115,115 to £118,223 where the ‘dismissal’ is effective on or after 6 April 2025.
Compensation for Injury to Feelings – The ‘Vento Bands’.
Where an Employment Tribunal awards compensation to an employee/worker for injury to feelings as a result of an unlawful discrimination and/or whistleblowing claim (presented on or after 6 April 2025), the Tribunal will award such compensation with reference to the following bands (following the principles established in the Court of Appeal case of Vento v Chief Constable of West Yorkshire Policy (2003 IRLR 102):
- The Lower band of £1,200 – £12,100 for less serious cases;
- The Middle band of £12,100 – £36,400 for cases that do not merit an award in the Upper band;
- The Upper band of £36,400 – £60,700 for the most serious cases; and
- The most Exceptional cases capable of exceeding £60,700.
National Minimum Wage and National Living Wage
From 1 April 2025, both the National Living Wage (for those aged 23 and over) and the National Minimum Wage (for those aged 16 – 22) increased, the government having previously accepted the Low Pay Commission’s recommendations in full. The new rates are as follows:
The new rates are as follows:
|
NMW Rate |
Increase to (£) |
Increase (amount/percentage) |
|
National Living Wage (21 and over) |
£12.21 |
£0.77 |
|
18-20 Years Rate |
£10.00 |
£1.40 |
|
16-17 Years Rate |
£7.55 |
£1.15 |
|
Apprentice Rate |
£7.55 |
£1.15 |
|
Accommodation Offset |
£10.66 |
£0.67 |
Additional information can be obtained for employees and employers is available at https://checkyourpay.campaign.gov.uk.
More Support
Our specialist Employment Law team can provide advice on Employment Law matters, including claims relating to unfair dismissal, unlawful discrimination and/or whistleblowing.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
