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RPI-linked compensation limits to fall in 2010

The maximum compensatory award for unfair dismissal falls from £66,200 to £65,300; The maximum guarantee payment payable to an employee in respect of any day under S.31(1) of the Employment Rights Act 1996 (where the employee would normally work, but no work is provided) falls from £21.50 to £21.20.

The new limits apply when the event giving rise to the entitlement to compensation, or other payment, occurs on or after 1 February 2010. Note, however, that the economic downturn had the reverse effect for the limit on a week’s pay used to calculate, among other things, redundancy payments and the unfair dismissal basic award. In October 2009 the RPI formula was suspended for all weekly limit calculations to allow a one-off increase from £350 per week to £380, which will remain in force until February 2011 at the earliest.

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