New cap on compensation for unfair dismissal

The move was attacked by trade unions as “punishing” victims of ill-treatment at work, while business groups said it would give employers more confidence to take on staff.

Employment Relations Minister Jo Swinson said there were no plans to change the compensation limit of £72,000, but maintained that a 12-month cap would provide greater certainty about the maximum liability that can be paid in an unfair dismissal claim. The change will come in during the summer, alongside a statutory code of practice which will include an explanation of improper behaviour.

“We are committed to finding ways to support both businesses and employees when a working relationship breaks down. Employment tribunals are costly for everyone, in terms of money but also time and stress. We need to tackle unrealistic expectations about the levels of compensation awards, especially when only one in 350 people who make a claim for unfair dismissal receive an award of more than their own salary.”