Statutory cap

Employment tribunal awards are not unlimited — several statutory caps set the ceiling, and mixing them up is one of the easiest mistakes to make when working out what a claim could be worth.

Is the statutory cap the same figure for every type of award?

No — there are several separate caps that share the same underlying weekly pay figure but apply differently. The week's pay cap of £751 feeds into the basic award and redundancy pay formula, while the compensatory award has its own, much larger, separate ceiling.

Does the statutory cap apply to discrimination claims?

No. Compensation for discrimination under the Equality Act 2010, including injury to feelings under the Vento bands, is not subject to the statutory compensatory award cap — there is no fixed ceiling, and awards are based on what the tribunal considers just and equitable.

Why do the caps change every April?

The relevant figures are reviewed annually and uprated by statutory instrument, broadly in line with inflation, so that the real value of the caps does not erode over time. Each new order applies to dismissals or effective dates of termination on or after the date it comes into force, not retrospectively.

If I earn well above the weekly pay cap, does that mean I lose out?

It depends which award is involved. The week's pay cap limits how much of your actual pay counts toward the basic award and redundancy pay formula, regardless of how much you actually earn. The compensatory award works differently — it uses your real pay, subject to the lower of 52 weeks' actual pay or the separate compensatory award cap.

Does whistleblowing dismissal have a cap?

No. Where a dismissal is automatically unfair because it was for making a protected disclosure, the compensatory award cap does not apply, reflecting Parliament's intention to give whistleblowers stronger protection than the general unfair dismissal regime.

Where can I check the current figures myself?

The current caps are set out in the relevant Employment Rights (Increase of Limits) Order, published on legislation.gov.uk, and summarised each April by ACAS and most employment law firms — always check the date a dismissal took effect against the order that was in force on that date.

Does the statutory cap apply to redundancy pay as well as unfair dismissal?

The week's pay cap feeds into both the statutory redundancy pay formula and the unfair dismissal basic award, since they share the same underlying calculation under the Employment Rights Act 1996 — but redundancy pay itself has no separate compensatory-award-style cap on top of that.

The three statutory caps explained

, currently £751, limits how much of your actual weekly pay counts toward the basic award and statutory redundancy pay formula — even if you earn considerably more, the calculation uses the capped figure, not your real salary.

, currently £22,530, is the ceiling on the basic award itself — the product of the week's pay cap, the maximum 20 years of service the formula counts, and the highest 1.5-week multiplier for years worked from age 41 onward.

compensatory award cap

, currently £123,543, is entirely separate and works differently — it caps the compensatory award at whichever is

of 52 weeks of your actual gross pay, or this fixed figure. Unlike the basic award, this calculation starts from your real pay, not the capped weekly figure.

Which claims the caps do not apply to

The compensatory award cap does not apply to dismissal for making a protected disclosure (whistleblowing), nor to most claims of discrimination under the Equality Act 2010. In those categories, a tribunal can award whatever it considers just and equitable to compensate the actual loss, including injury to feelings under the Vento bands, with no fixed statutory ceiling.

Why the caps change every April

The figures are reviewed annually and increased by statutory instrument, generally in line with inflation, so their real value does not erode year on year. Each new order applies from a specific commencement date — typically 6 April — and governs dismissals or effective dates of termination on or after that date. An earlier dismissal is assessed under whatever order was in force when it happened, not the current one, which matters when working out what an older claim could be worth.

Why the caps matter when negotiating a settlement

Knowing the current caps is essential before agreeing a settlement figure with an employer, since a tribunal award is the realistic ceiling either side is negotiating in the shadow of. An employer facing a claim where the compensatory award cap or the 52-week earnings ceiling would bite hard has less incentive to settle generously than one facing a discrimination or whistleblowing claim, where there is no fixed statutory ceiling at all.

Equally, claimants sometimes overestimate what a straightforward unfair dismissal claim could be worth by forgetting the cap applies, or underestimate a discrimination claim by wrongly assuming the same limit applies there too.

An employee earning £900 a week is dismissed and succeeds in an ordinary unfair dismissal claim, with 12 years of continuous service. For the basic award, the weekly figure used is capped at £751, not the actual £900, so the calculation runs on the lower, capped amount. For the compensatory award covering actual financial loss, the tribunal instead uses the real £900 weekly pay, subject to the overall ceiling of whichever is lower — 52 weeks of that real pay, or £123,543. The two parts of the award are therefore worked out on two different pay figures, capped in two different ways.

Employment Rights Act 1996, s.227

Employment Rights Act 1996, s.124

Statutory Cap — Employment Tribunal Glossary

What the statutory cap on employment tribunal awards means, how the week's pay, basic award and compensatory award caps differ, and which claims fall outside them.