The limits on awards in the employment tribunal will rise from 1 February in line with inflation.
Tribunal compensation limits will increase by 5.6% to reflect the increase in the Retail Prices Index as at September 2011.
This means that the maximum compensatory award for unfair dismissal claims will rise from £68,400 to £72,300.
The limit on a week's pay will rise from £400 to £430 which means that the maximum basic award for unfair dismissal and statutory redundancy payments will increase from £12,000 to £12,900.
The new limits will only apply in dismissal cases where the effective date of termination is on or after 1 February 2012.