From 1st February 2012, under the Employment Rights (Increase of Limits) Order 2011, the maximum compensatory award for unfair dismissal will increase by 5.7% to £72,300 from £68,000. The new limit will apply where the event giving rise to compensation or payment occurs on or after 1st February 2012.
The minimum basic award for unfair dismissal (which applies to dismissals by reason of trade union membership activities, health and safety duties, occupational pension scheme trustee duties or acting as an employee representative) increases from £5,000 to £5,300. The government has also stated that from 6th April 2012, the qualifying period of service for an employee to claim unfair dismissal will increase from one to two years.
Robert Cholmondeley, Director of Sentinel Corporate Risk , stated that “for many companies the employment law arena is a minefield and compensation (and legal) costs do increase in periods of recession. Whilst many employers may welcome the extension of the qualifying period to two years, others have suggested that claimants may bring more discrimination claims in the Employment Tribunal if they cannot bring unfair dismissal claims”.
He went on to say “there is additionally no qualifying period of service for unfair dismissal claims alleging whistleblowing or for clams of unlawful discrimination. Employers should consider the purchase of Employment Law insurance protection which is widely available through Management Risks policies”.
