Imposing a cap on the unfair dismissal compensatory award of twelve months` pay (and still capped at the current limit, if twelve months` pay is greater)
18 January 2013
Subject to Parliamentary process, the Government announced yesterday that it intends to introduce a 12 months’ pay cap on the compensatory award for unfair dismissal.
On the issue of whether the overall cap is currently set at an appropriate level, the Government has been considering the option of a cap on individual awards of 12 months pay alongside the overall cap where the applicable limit is the lesser of the two figures. The reasoning behind is to encourage more realistic perceptions of the likely level of awards, thereby encouraging earlier resolution of employment disputes.
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