Further challenge to cap on unfair dismissal compensatory awards

cap on unfair dismissal

Compromise Agreement Ltd are once again challenging the cap on unfair dismissal compensatory awards.


As you will recall, on 29th July 2013 the compensatory award limits in the Employment Tribunal changed from the statutory cap to the lower of;

1.       The statutory cap (currently £78,335)

2.       52 weeks gross pay.

Compromise Agreement Ltd felt that this decision would adversely impact older people who, they said were more likely to be out of work for more than 52 weeks. Their argument was therefore based on indirect age discrimination.

In May 2014 the High Court rejected their application for a judicial review of the decision.

They have now applied for permission to appeal to the Court of Appeal who, on 19th May 2015, will decide whether to not to grant permission.

If Compromise Agreement Ltd are successful and the decision is quashed, then the law would revert to the previous position, which was that compensation for unfair dismissal claims was just subject to the statutory cap. This meant that employees who were low to medium earners could in many cases recover more than 52 weeks’ pay.

We have recently had a case where although our client was successful in the Employment Tribunal and had ongoing losses, he could only recover 52 weeks gross pay under the compensatory award element of his claim.

Watch this space for further updates.