As of April, the latest annual increase to some of the rates that employers need to be aware of have taken effect.
We’ve already reported on the significant increases to the National Minimum Wage that apply from April onwards but there are other important rate changes for employers to be aware of if considering making any redundancies or if faced with the consequence of a discrimination claim.
Increase to a “week’s pay"
The concept of a week’s pay is set out in the Employment Rights Act 1996 and it forms the basis for certain individual statutory rights including how a statutory redundancy payment is calculated and also the basic award in successful claims of unfair dismissal.
When calculating a statutory redundancy payment, the employee’s entitlement is based on their age and the number of complete years of service that they have. This translates into an entitlement for a number of weeks’ pay.
The rules on a week’s pay impose a statutory limit which means that even if an employee earns more per week than the limit, their redundancy pay is calculated in accordance with the statutory limit.
From 6 April, the limit on a week’s pay will increase from £643 to £700 which will result in an increase in cost for those employers planning to make redundancies over the coming months.
Increase to awards for Injury to Feelings
April also marks an increase to the Vento bands. The Vento bands are used by employment tribunals as guidance for how to assess levels of compensation for injured feelings in successful discrimination claims.
There are three main bands with a lower band for less serious cases; a middle band for serious cases but which don’t merit an award in the higher band; and a higher band for the most serious cases such as where there has been a lengthy campaign of discriminatory treatment. It would only be in the most exceptional case that an award for injury to feelings would exceed the top band.
From 6th April onwards, there will be an increase to the bands as follows:
Date claim presented: 6 April 2024 – 5 April 2025
- Lower band - £1,200 - £11,700
- Middle band - £11,700 - £35,200
- Top band - £35,200 - £58,700
Date claim presented: 6 April 2023 – 5 April 2024
- Lower band - £1,100 - £11,200
- Middle band - £11,200 - £33,700
- Top band - £33,700 - £56,200
Family Friendly Payments and Statutory Sick Pay
Also increasing are the rates at which statutory maternity, paternity, adoption, shared parental pay and parental bereavement pay are paid.
From 7 April, the main rates increase from £172.48 per week to £184.03.
Statutory sick pay also increases from 6 April from £109.40 per week to £116.75.
Comment
Daniel Gorry, Partner in our Employment Team comments:
“While these increases are typical of the annual cycle of rates and limits being increased, the increase to the Vento bands in particular provide a stark reminder of the significant financial risk associated with successful discrimination claims.
“Employers dealing with workplace issues that could lead to a discrimination claim are strongly encouraged to seek advice at the earliest opportunity as there are often ways of finding a resolution to avoid matters escalating to the time, cost and risk of having to defend an Employment Tribunal claim.”
Published 17 May 2024.
