The maximum amounts which can be awarded
by Tribunals in employment cases have been increased again under new
Employment Tribunal compensation for unfair dismissal is, broadly
speaking, divided into two parts. The first part (the basic award)
depends on the employee's age, length of service and gross weekly pay.
The second (the compensatory award) is designed primarily to
compensate the employee for his actual loss of earnings following
Under the Employment Rights (Increase of Limits) Order 2001, both the
basic and compensatory awards are set to increase.
In the case of the basic award, the maximum gross weekly salary which
can be taken into account increases from £230 to £240. This increase
also applies to the maximum gross weekly salary which can be taken
into account when calculating a statutory redundancy payment.
As regards the compensatory award, the maximum amount of this award
increases from £50,000 to £51,700. Many employers will already be
adjusting to the massive £38,000 increase in the compensatory award
which was introduced in respect of all dismissals taking place on or
after 25 October 1999.
Employers should also be aware that, as recently as 16 January 2001,
it was reported in the Times that, in what is believed to be the first
decision of its kind, an Employment Tribunal has awarded an Applicant
the maximum compensatory award of £50,000.
Commenting on the changes, Robert Dillarstone, Partner and Head of
Employment & Employee Benefits Department at Greenwoods
Solicitors, said: "The new limits will apply to all dismissals
taking effect on or after 1 February 2001 and will serve as a further
incentive for employers to ensure that their procedures are watertight
when making important decisions regarding the future of their