Annual increase in compensation limits

20 December 2010

The Annual increase in compensation limits comes into effect on 1 February 2011. The new maximum compensatory award for Unfair Dismissal will increase by £3,100 from £65,300 to £68,400. The new maximum for a week’s pay will increase by £20 from £380 to £400. The maximum unfair dismissal award (basic plus compensatory) will be £80,400.

Many City professionals are shocked to learn, when they take advice on the termination of their employment that unfair dismissal compensation is subject to a statutory maximum cap, which is not reflective of their level of remuneration. For some senior executives, the statutory cap is less than 50% of their base salary.

What do you think? Should the cap be abolished, so that all employees can be compensated on the basis of their actual losses going forward, in the same way that compensation for discrimination is calculated?

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