Each year around April, all of the payments due for statutory employment rights and benefits typically rise. This year, however, only some of them are increasing and these increases are dwarfed in comparison to recent years.
For the tax year commencing on April 6 of this year, statutory maternity, paternity, adoption and shared parental pay will stay as they are at almost £140/week. Statutory sick pay will also remain as is.
These rates are remaining unchanged because of the low inflation rate.
This year, there will be a rise in statutory redundancy pay as well an increase in the amounts that can be awarded in tribunal claims, like those for unfair dismissals. This change will apply to dismissals that have termination dates of April 6 or later. The new rate includes a maximum amount of a week’s pay for calculating statutory redundancy pay and the basic award for unfair dismissal up from £475 to £479. Additionally, the maximum basic award for unfair dismissal increased to £14,370 from £14,250. The maximum compensatory award, which can be made after a successful unfair dismissal tribunal claim classified as “ordinary” was increased by £627 and the maximum potential award for unfair dismissal when the basic and compensatory awards are combined, increased by £747.
Human resource experts explain that since these increases aren’t as significant as predicted, it won’t make a huge difference to employers. In any case, even the increase in the maximum compensatory award for unfair dismissal will really only apply to the most highly paid employees.
Arguably though, the most important change made is the new statutory redundancy payment figure. While the increase in cost is minimal, a case involving individual redundancy could potentially result in large additional costs for employers undertaking large-scale redundancy exercises.
Prior to Budget discussions, Chancellor George Osborne announced increases to the national minimum wage as well. Beginning in October 2016, the minimum wage for 21-24 year-olds and 18-20 year-olds will increase by 25 pence per hour. Apprentice hourly rates will increase by 10 pence.
