Unfair dismissal – compensation capped

18th July 2013

The Government has today announced when an important change to employment law will come into place.

From 29th July 2013 a cap will be imposed on the compensatory element of unfair dismissal awards which will be the lower of:

a) One year’s gross pay; or

b) £74,200

It is unusual for an unfair dismissal compensatory award to be £74,200 and it is likely that the one year cap is of more significance.

Of more significance to most employers will be the one year’s pay limit which will mean the worse case scenario in terms of damages is now more certain and likely at a lower level than before the change was introduced.

The government’s announcement can be viewed here.