Fri 9 March, 2018
Minimum wages increases and increases in employment tribunal awards.
The National Living Wage(1) (or Minimum Wage) is the minimum pay per hour workers are entitled to by law and the rate depends largely on a worker's age and if they are an apprentice. These rates are reviewed yearly by the government and are advised by the independent body Low Pay Commission(2).
Following on from the Budget in November 2017, Chancellor Phillip Hammond announced that there would be an increase in the National Living Wage from 1st April this year. Philip Hammond's increase in the National Living Wage is linked to a long-standing Conservative pledge to deliver a rate of £9-an-hour for over 25s by 2025.
So what do you need to know?
The increase is set come on 1 April, 2018.
Aged 21-24? The current rate is £7.05 and this will rise to £7.38.
Aged 18-20? The current rate is £5.60 and this will rise to £5.90.
Aged below-18? The current rate is £4.04 and this will rise to £4.20.
Apprentice? The current rate is £3.50 and this will rise to £3.70.
Compensation limits in Employment Tribunal awards to increase
The employment tribunal (3) compensation levels are reviewed annually and the increases this year are higher than we have seen in previous years.
The Employment Rights (Increase of Limits) Order 2018 (4) increases compensation limits and minimum awards payable under employment legislation.
These increases will come into force from 6 April 2018 and this means that where a dismissal or relevant event occurs before this date, the old limits will still apply, irrespective of the date on which compensation is awarded.
The increases are:
maximum limit on compensatory award for unfair dismissal will increase to £83,682 from £80,541;
maximum limit on a week's pay for calculating unfair dismissal basic award and statutory redundancy payments increase to £508 from £489;
guarantee pay will increase from £27 to £28 per day;
the minimum basic award in cases where a dismissal is unfair by reason of health and safety, employee representative, trade union, or occupational pension trustee reasons will increase from £5,970 to £6,203;
award for unlawful inducement relating to trade union membership or activities, or for unlawful inducement relating to collective bargaining increased to £4,059 from £3,907;
The increases made by this Order reflect the increase in the retail prices index (5) of 3.9% from September 2016 to September 2017 and are in accordance with the formula set out in the Employment Relations Act 1999 (6) .
1. National Minimum Wage and National Living Wage rates - GOV.UK [Internet]. [cited 2018 Mar 5]. Available from: https://www.gov.uk/national-minimum-wage-rates
2. Low Pay Commission - GOV.UK [Internet]. [cited 2018 Mar 5]. Available from: https://www.gov.uk/government/organisations/low-pay-commission
3. Employment Tribunal - GOV.UK [Internet]. [cited 2017 Dec 11]. Available from: https://www.gov.uk/courts-tribunals/employment-tribunal
4. The Employment Rights (Increase of Limits) Order 2018 [Internet]. [cited 2018 Mar 5]. Available from: http://www.legislation.gov.uk/uksi/2018/194/made
5. Inflation and price indices - Office for National Statistics [Internet]. [cited 2018 Mar 5]. Available from: https://www.ons.gov.uk/economy/inflationandpriceindices
6. articipation E. Employment Relations Act 1999 [Internet]. [cited 2018 Mar 5]. Available from: https://www.legislation.gov.uk/ukpga/1999/26/contents