There has always been a statutory cap on the compensatory award a Claimant can receive if they are successful with an unfair dismissal claim. The cap increases each year with the Average Earnings Index and it is currently £76,574. However, the government introduced a new cap equating to one year’s salary last year. This meant that, for the vast majority of employees, the amount they could potentially receive at tribunal for unfair dismissal was substantially reduced.
Alex Monaco of Compromise Agreements launched a judicial review application, arguing it disproportionately affects older people, as they are most likely to receive more than a year’s salary in compensation due to difficulty in finding another job. Earlier this month the High Court dismissed the judicial review application at a permission hearing. Mr Monaco is considering whether to appeal or not.
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This decision is not a surprise following on from the unsuccessful judicial review applications involving tribunal fees. However, with the large decrease in tribunal claims, the government is under increasing pressure to review these changes. It may be that the fees and caps, while not disappearing, will be changed to be less of a deterrent to lodging tribunal claims.
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