Employment Relations Act 1999 s.34 provided for a massive increase in maximum compensatory award on unfair dismissal. It increased the maximum compensatory award limit from £12,000 to £50,000. That increase applied when the effective date of termination (''edt'') is on or after 25th October 1999 (see Employment Relations Act 1999 (Commencement No 2 and Transitional and Savings Provisions) Order 1999, SI 1999/2830, sch 1 and sch 3, para 8). Since then there have been several further increases.

In addition to compensatory award a successful claimant in an unfair dismissal case is also entitled to a basic award calculated by reference to a fixed formula (see notes at Unfair dismissal/basic award/calculation of (normal cases) ).

The maximum possible award in "normal" unfair dismissal cases in recent years is/has been:

• £18,600 (ie £12,000 plus 30 X £220 for maximum basic award) before 25th October 1999;
  
• £56,600 (ie £50,000 plus 30 X £220) from 25th October 1999 to 31st January 2000;
  
• £56,900 (ie £50,000 plus 30 X £230) from 1st February 2000 to 31st January 2001;
  
• £58,900 (ie £51,700 plus 30 X £240) from 1st February 2001 to 31st January 2002;
  
• £60,100 (ie £52,600 plus 30 X £250) from 1st February 2002 to 31st January 2003;
  
• £61,300 (ie £53,500 plus 30 X £260) from 1st February 2003 to 31st January 2004;
  
• £63,100 (ie £55,000 plus 30 X £270) from 1st February 2004 to 31st January 2005;
  
• £65,200 (ie £56,800 plus 30 X £280) from 1st February 2005 to 31st January 2006;
  
• £67,100 (ie £58,4000 plus 30 X £290 from 1st February 2006 to 31st January 2007;
  
• £69,900 (ie £60,600 plus 30 X £310 from 1st February 2007 to 31st January 2008;
  
• £72,900 (ie £63,000 plus 30 X £330 for maximum basic award from 1st February 2008.

For outline notes on increases in effect from 1st February 2008 pursuant to the Employment Rights (Increase of Limits) Order 2007, SI 2007/3570 see Maximum and minimum tribunal awards/statutory limits .

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Index linking.

The Employment Relations Act 1999 s.34(1) also requires the Secretary of State to make annual orders to index link most of the maximum limits by reference to changes in the Retail Prices Index (RPI) for September, up or down, in each year, the RPI being defined for this purpose as "the general index of retail prices (for all items) published by the Office for National Statistics" (Employment Relations Act 1999 s.34(5)). Previously the only obligation had been to review certain limits annually (ERA 1996 s.208, now repealed). The first indexation increase was made in December 1999 in respect of awards where the appropriate date fell on or after 1st February 2000. The most recent increase was made by thehe Employment Rights (Increase of Limits) Order 2007, SI 2007/3570 which applies where the appropriate date falls on or after 1st February 2008 - and see notes at Maximum and minimum tribunal awards/statutory limits which includes general outline notes on increases in effect from 1st February 2008.

The position above was not affected by the confirmatory announcement in the pre-budget report of 10th December 2003 that henceforward the monetary policy inflation target will be switched from an RPI based target to one based on the "harmonised index of consumer prices" (renamed the "Consumer Prices Index" or CPI). This affects Bank of England targets and makes no difference to the annual adjustments required by Employment Relations Act 1999 s.34.

The limits which were made subject to annual RPI based indexation by Employment Relations Act 1999 s.34 are in respect of:-

• guarantee payment ;
  
• unfair dismissal: minimum amount of basic award in certain cases (see UNFAIR DISMISSAL/basic award/minimum in certain cases );
  
• unfair dismissal: compensatory award;
  
• government guarantess on insolvency of employer (see Insolvency );
  
• maximum amount of a week's pay for purposes of certain calculations including unfair dismissal basic award;
  
• awards on denial of right to membership of a trade union (see Trade union matters/right to join ).

removal of compensatory award cap in health and safety and whistleblowing cases

Statutory limits on maximum compensatory award were removed altogether in certain unfair dismissal cases by Employment Relations Act 1999 s.37 with effect from 25th October 1999 (see Employment Relations Act 1999 (Commencement No 2 and Transitional and Savings Provisions) Order 1999, SI 1999/2830, sch 1).

The cases in which any compensatory award cap was removed on 25th October 1999 are:-

(i) where the dismissal was for a health and safety related reason (ERA 1996 s.100);
(ii) where the dismissal was because of the exercise of Whistleblowing rights (ERA 1996 s.103A);
(iii) where a person was selected for redundancy for a health and safety related reason (ERA 1996 s.105(3); and
(iv) where a person was selected for redundancy because of the exercise of Whistleblowing rights (ERA 1996 s.105(6A))

For more detail generally see MAXIMUM AND MINIMUM TRIBUNAL AWARDS .