The Employment Rights (Increase of Limits) Order 2026 raises a range of tribunal awards and statutory employment payments from Monday 6 April 2026. The adjustment follows the statutory indexation duty under section 34 of the Employment Relations Act 1999 and applies the September‑to‑September Retail Prices Index, which the Office for National Statistics reports at 4.5% for September 2025. (ons.gov.uk)
On Policy Wire calculations using the statutory formula and rounding rule, the cap on “a week’s pay” used for statutory redundancy, certain basic and additional awards, and for debts paid by the Insolvency Service, increases from £719 to £751. The maximum compensatory award for ordinary unfair dismissal becomes £123,543 (or 52 weeks’ gross pay if lower). The daily limit for statutory guarantee pay rises to £41. These figures reflect a 4.5% uplift applied to the 2025 limits and rounded to the nearest pound, as required by government guidance on section 34. (employmentcasesupdate.co.uk)
For redundancy budgeting, the new week’s‑pay cap lifts the maximum statutory redundancy payment to £22,530 for qualifying dismissals on or after 6 April 2026, based on the 30‑weeks ceiling in the Employment Rights Act 1996. Employers should refresh templates and HRIS settings accordingly; the government’s redundancy guidance confirms the statutory structure and the interaction with the week’s‑pay cap. (gov.uk)
A series of fixed‑sum awards also move up by 4.5%. The award for unlawful inducements relating to trade union membership or collective bargaining (Trade Union and Labour Relations (Consolidation) Act 1992, section 145E) increases to £5,993. Minimum basic awards for specified automatic unfair dismissals (including certain health and safety and trade union reasons) rise to £9,157. The minimum compensation where an individual is excluded or expelled from a trade union in breach of statute increases to £13,986. (employmentcasesupdate.co.uk)
Tipping reforms introduced into the Employment Rights Act 1996 in 2024–25 mean two specific caps are uprated: the maximum compensatory award for failure to allocate and pay qualifying tips fairly, and the cap for failing to have a compliant written policy or records. Each increases to £5,366 from 6 April 2026. Employers operating tronc or pooled arrangements should confirm their written policy meets the statutory requirements alongside the uprated caps. (employmentcasesupdate.co.uk)
Statutory guarantee pay, payable on workless days during lay‑off or short‑time working, uplifts to £41 per day. The underlying entitlement remains limited to five days in any rolling three‑month period, which should be tracked carefully in payroll and workforce planning. (gov.uk)
Transitional provisions follow the standard approach. The new limits apply where the “appropriate date” for the claim or payment falls on or after 6 April 2026; the 2025 limits continue to apply where the appropriate date is before that. In practice this means, for example, the “effective date of termination” governs unfair dismissal, the “relevant date” governs statutory redundancy, and the day in respect of which guarantee pay is due governs SGP. The Department for Business and Trade’s explanatory material confirms the annual uprating mechanism and rounding method used. (lgpslibrary.org)
Geographically, these changes apply across Great Britain. Northern Ireland sets equivalent limits via separate legislation, so employers with workforces on both sides of the Irish Sea should verify the contemporaneous Northern Ireland orders before applying rates. The 2025 explanatory memorandum sets out the GB extent and the annual adjustment process that continues in 2026. (lgpslibrary.org)
Operationally, employers, payroll providers and insolvency practitioners should update internal guidance, settlement parameters and HR systems ahead of 6 April 2026. Finance teams should re‑cost ongoing restructurings, HR should refresh redundancy and settlement templates to reflect the £751 week’s‑pay cap and the £123,543 unfair dismissal ceiling, and ER teams should brief managers on the higher fixed‑sum awards in union and tips cases to mitigate exposure.
These changes are formula‑driven rather than discretionary. They flow from retail price inflation and a rounding rule to the nearest pound, preserving predictability for workforce planning. For policy professionals, the indexation mechanism remains a useful barometer of real‑terms movements in employment liabilities against inflation, without altering substantive rights or remedies. (ons.gov.uk)