Legal advice: Rising cost of sacking staff
Higher limits for employment tribunal compensation set.
by Rebecca Caws of thePublican.com's team of legal experts from London solicitors Joelson Wilson
From February 1, the limits for compensation payable to a successful applicant in an employment tribunal case will increase.
So an employer faced with an employment tribunal case may soon face a higher pay-out than he might currently expect. The new levels are set out in the Employment Rights (In-crease of Limits) Order 2003 and include the following:
- £270 (from £260): maximum for a week's pay to calculate the basic or additional award of compensation for unfair dismissal or a redundancy payment
- £55,000 (from £53,500): maximum unfair dismissal compensatory award
- £3,600 (from £3,500): minimum unfair dismissal award where the dismissal is automatically unfair on the grounds of trade union activities, redundancy based on trade union activities, activities as a health and safety representative, activities as a pension scheme trustee, activities as an employee representative or activities as a workforce representative in a Working Time Regulations 1998 case.
The increases are calculated by reference to the retail prices index, so are not particularly high. For example, if a 50-year-old employee, who has been continuously employed for eight years, was to win a claim now, the basic award would be £3,110.
Based on the same example, once the limits increase the basic award will rise to £3,240. An increase of £130 is obviously not too dramatic, but must be considered in conjunction with the £1,500 increase for the compensatory award.
The increase only applies to claims based on an event that occurred on or after February 1 2004. So an award for any existing claims will be calculated on the 2003 figures (shown in brackets left).
This means that if a claim were brought for a dismissal that took place in January 2004, the 2003 figures would still apply, because the event in question (ie the dismissal) occurred before February 1 2004.
