New Salary Cap for Unfair Dismissal - Also Coming Into Force on 29 July 2013

    View Authors July 2013

    The UK Government has announced that, subject to completing parliamentary scrutiny, the Unfair Dismissal Compensation Cap will come into force on 29 July 2013, capping the compensation element of unfair dismissal awards at the lower of the current limit (£74,200) and 52 multiplied by a week’s pay of the person concerned, i.e. 12 months’ pay.  The change will apply to dismissals which take effect after 29 July and a week’s pay for these purposes will be based on the statutory definition of a week’s pay contained in the Employment Rights Act 1996.
    The timing of this change will coincide with the introduction of Settlement Agreements, as well as the new Tribunal Rules and Tribunal Fees.  We attach a note summarising the Employment Tribunal changes that will be taking place.  There have been judicial review challenges to the introduction of fees, but as things currently stand they are still due to be coming into force on 29 July.

    The Government has also:

    • Published its Response to the Consultation on Early Conciliation – under this proposal individuals will be required to approach Acas in the first instance to explore conciliation before being able to submit a claim to an Employment Tribunal.  This change is due to come into force in early 2014.
    • Published a Call for Evidence on whistleblowing, seeking views on the effectiveness of the current whistleblowing framework, and specifically whether there is enough support for people to report wrongdoing.