Unfair dismissal awards to be capped

The government has announced that it intends to change the compensatory award for unfair dismissal.

At present the maximum compensatory award that a claimant can receive for unfair dismissal is £72,300 (due to rise to £74,200 from February 2013).  It was argued by many that this maximum was too high but also that it provided claimants with an unrealistic picture of what they can actually seek to achieve if successful at a Tribunal.  The average award for unfair dismissal is significantly lower than the maximum achievable.

With this in mind the government has proposed that the compensatory award be capped at a year’s salary (or the current maximum if lower).

This is another example of the government seeking to take a proactive approach to employment legislation and remove existing anomalies and red tape.

This is at present just a proposal.