The payments due for statutory employment rights and benefits commonly increase every year with the budget.  However, the government is doing it differently this year as they have said that only some of these will be increased.

There will be an increase to the statutory redundancy pay as well as the amount that can be awarded to those involved in tribunal claims. In comparison to recent years, these claims are lower and some payments for employment rights will not be increased at all.

On April the 6^th, the new tax year saw no changes to statutory maternity pay, paternity, adoption and shared parental pay as they all remained at £139.58 each week. This is likely to affect employees during the 33 weeks of statutory maternity/adoption pay that they receive, following the six week period in which they earn 90% of their weekly earning. Statutory sick pay will stay at £88.45 per week and this can be paid for a period of up to 28 weeks.  The rate of £139.58 will also relate to two weeks of paternity pay as well as the 39 weeks of shared parental pay.

The Chartered Institute of Personnel Development (CIPD) have stated that the lack of change in these rates is down to the low inflation rate. However, in reality, a number of employers actually pay an increased sick pay rate for a large chunk of their employees time off work but the costs associated with staff sickness will not rise for those businesses that pay the statutory rate as a result of low inflation.

For those who have been unfairly dismissed, the compensation they could receive has been capped at a total year’s gross salary but in a number of instances there is no cap in place for the awards that can be given. An example of this would be someone who has been dismissed unfairly based on a protected characteristic or whistleblowing.

Alterations to these limits for tribunal awards will be barely noticeable for businesses and organisations. As far as the maximum compensatory award for unfair dismissal goes, the increase is only applied to those who are highly paid.

The new redundancy payment figure should be noted as this is a crucial change and this applies to those cases where employment is likely to end on or following the 6^th April.

There will only be a small increase in the costs related to individual redundancy but it could lead to extra costs for those businesses involved in large dismissal programmes. Therefore, it will have to be included in all assessments relating to costs when it comes to future discharges.

With the budget, came changes to the national minimum wage and from October the wage for 21-24 year olds is increasing from £6.70 to £6.95 per hour. For 18-20 year olds this will rise from £5.30 to £5.55. The rates for 16-17 year old will increase to £4 from £3.87 while the rates for apprentices will rise to £3.40 per hour from £3.30.

For more information, please contact the employment law team at Fletcher Day