This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Explanation of Employment Tribunal compensation limits in England and Wales, including unfair dismissal caps, uncapped discrimination awards, Vento bands, and key statutory thresholds affecting compensation calculations.
Employment tribunals in England and Wales can award financial compensation when an employee or worker succeeds in a claim such as unfair dismissal, discrimination, whistleblowing detriment, or breach of statutory rights. However, many types of awards are subject to statutory limits, while others are uncapped.
The applicable limits are updated periodically, usually annually, and depend on the type of claim, the employee's earnings, and the nature of the legal breach. Understanding these limits is essential when assessing the potential value of a claim or settlement.
Overview of Employment Tribunal Compensation Structure
Employment Tribunal awards generally fall into four main categories:
- Basic award (mainly unfair dismissal)
- Compensatory award (financial loss caused by dismissal)
- Statutory and fixed awards (specific employment rights breaches)
- Discretionary awards (for example injury to feelings in discrimination cases)
Some categories are capped by statute, while others are determined at the Tribunal's discretion.
Unfair Dismissal Compensation Limits
Unfair dismissal is one of the most common tribunal claims and is subject to two key limits.
1. Basic Award
The basic award is calculated using the statutory redundancy formula, which takes into account:
- Age
- Length of service
- Weekly pay (subject to a statutory cap)
From 6 April 2026, the maximum “week's pay” used in calculations is £751.
This results in a maximum basic award of £22,530 in most cases.
2. Compensatory Award
The compensatory award covers financial losses such as:
- Loss of earnings
- Loss of pension contributions
- Loss of statutory rights in some cases
- Future loss of income (if applicable)
It is subject to a statutory cap, which is the lower of:
- 52 weeks' gross pay, or
- £123,543 (from April 2026 levels)
This means higher earners are restricted by the monetary cap, while lower earners are limited by one year's salary.
Important change (future reform)
Legislation is expected to remove the unfair dismissal compensatory cap entirely in the future, meaning awards would be based solely on actual losses.
Claims With No Compensation Cap
Some Employment Tribunal claims are uncapped, meaning compensation is not subject to a statutory maximum:
1. Discrimination claims
Covered under the Equality Act 2010 (Equality Act 2010)
There is no upper limit on compensation. Awards may include:
- Financial loss
- Injury to feelings
- Psychiatric injury (in serious cases)
2. Whistleblowing dismissals
Covered under the Employment Rights Act 1996 (Employment Rights Act 1996)
These are also uncapped, meaning tribunals can award full proven losses.
3. Health and safety / protected rights dismissals
Certain automatically unfair dismissals (for example health and safety or trade union reasons) may also be uncapped depending on the claim type.
Injury to Feelings Compensation (Vento Bands)
Where discrimination is proven, tribunals may award compensation for “injury to feelings”. This is assessed using the Vento bands, which are updated annually.
From April 2026, the bands are approximately:
- Lower band: £1,300 – £12,600 (less serious cases)
- Middle band: £12,600 – £37,700 (more serious or sustained conduct)
- Upper band: £37,700 – £62,900 (serious or prolonged discrimination)
In exceptional cases, awards may exceed the upper band.
Other Common Tribunal Limits
1. Statutory week's pay cap
Used for multiple calculations, including redundancy and basic award:
- £751 per week (from April 2026)
2. Statutory redundancy pay
Capped at approximately:
- £22,530 maximum
3. Failure to allow accompaniment / procedural breaches
Typically capped at:
- Around 2 to 4 weeks' pay, depending on the breach
4. Protective awards (collective redundancy consultation failures)
- Up to 90–180 days' gross pay per affected employee, depending on circumstances
How Employment Tribunal Compensation Is Calculated
A tribunal will assess compensation based on:
- Type of claim (dismissal, discrimination, whistleblowing, etc.)
- Financial losses suffered
- Earnings and contractual terms
- Length of employment
- Conduct of employer and employee
- Statutory caps where applicable
In discrimination claims, tribunals also assess non-financial harm such as distress or reputational impact.
Key Practical Points
- Unfair dismissal is capped, discrimination and whistleblowing are generally uncapped
- The cap applies to the compensatory award only, not liability itself
- “Week's pay” is a fixed statutory figure used across multiple calculations
- Vento bands determine injury-to-feelings awards in discrimination cases
- Annual updates can significantly change potential compensation levels
- Different rules apply depending on the exact legal claim pleaded
Key Takeaways
Employment Tribunal compensation limits depend on the type of claim being made. Unfair dismissal claims are subject to statutory caps on both basic and compensatory awards, whereas discrimination and whistleblowing claims are generally uncapped and can result in significantly higher awards. Additional limits apply to weekly pay calculations and specific statutory breaches. Injury-to-feelings awards follow structured Vento bands, which are updated regularly.
