Unfair Dismissal Cap

Davies and Partners Solicitors has provided expert legal advice to employers and employees for more than 25 years. During this time, we have developed a national reputation for our outstanding services and we take pride in being able to offer cost-effective employment law advice.

Unfair dismissal cap

If an employee is successful in a claim for unfair dismissal he or she will receive an amount of compensation that is determined by age, length of service and remuneration. The basic award is calculated in the same way that a statutory redundancy payment is calculated. There is in addition a compensatory award providing financial compensation for actual amounts lost through a projected period of unemployment or a new job at lower pay, and for loss of statutory rights.

The compensatory award is calculated by looking at a number of factors but, in general, it is that sum which the Employment Tribunal considers 'just and equitable'. As of 6 April 2017, an employee can also recover compensation for loss of earnings up to a maximum of one year’s salary or £80,541, whichever is the lower. That means if your gross pay is higher than this amount, a tribunal can't award you more than £80,541. An employee is under an obligation to try to mitigate his or her loss by seeking to obtain other employment. For a compensatory award to be made, there are a number of conditions that will need to be met: whether the loss claimed to have been suffered was ‘as a consequence of the unfair dismissal´, ´attributable to the employer´ and whether it would be ´just and equitable´ to make such an award.
The limit of £80,541 applies to cases where the date of termination is on or after 6 April 2017. If you were dismissed between 6 April 2016 and 6 April 2017 the cap on compensation is £78,962. The cap is adjusted annually by the Secretary of State according to section 34 of the Employment Relations Act 1999. This is based on the Retail Price Index measured in the previous September. The relevant date is when the employment is terminated, not when the tribunal makes the award.

If you win your tribunal claim, the amount you've received in welfare benefits between the date of your dismissal and the date of the tribunal hearing will be deducted from your compensatory award. There are a limited number of cases where the cap does not apply.

Sometimes claims for unfair dismissal are brought in conjunction with other claims such as discrimination and breaches of the Working Time Regulations or National Minimum Wage or Living Wage. While there is normally a minimum level of continuous service needed before an employee can make an unfair dismissal claim, there are many exceptions to this rule. There is also a tight limit on the time frame in which you can make a claim of unfair dismissal after leaving a position.

Benefits to the employee of seeking legal advice in an unfair dismissal case

Factors that affect the amount of compensation you will be due include whether you are in any way responsible for your dismissal, refuse or are unable to cooperate, or if you fail to do what you can to seek alternative employment. As an employee, expert legal advice can help you to understand whether you meet the requirements for an unfair dismissal claim and, if you do, what you need to show to demonstrate that you have attempted to mitigate your loss.

Since your legal costs are not recoverable in your compensation, you will need an employment solicitor who is able to calculate whether you have a case and what compensation you should be expecting quickly and efficiently.

Benefits to employer of seeking legal advice in an unfair dismissal case

For employers, we can help you to understand disciplinary procedures, avoid unfair dismissal claims, and help you to avoid the costs of tribunals and compensation.

About Davies and Partners Solicitors

Our services to employees include any aspect of advice on Disciplinary Issues/Hearings; Grievance Issues; Unfair Dismissal; Redundancy; breaches of the Working Time Regulations, the National Minimum Wage or Living Wage; Constructive Dismissal; Discrimination Cases; Notice Periods; Redundancy Procedures; Settlement Agreements and Whistle Blowing Advice.

If you would like to hear about any of our employment law advice services, including No Win No Fee claims, please get in touch to discuss your requirements today. Whether you are an employer or an employee and whatever the issue you are concerned about, we take pride in providing the most cost-effective, current and helpful assistance with employment law.

You can email us, fill in our online form, telephone or visit us at one of our four offices in Barnwood Business Park, Gloucester; Aztec West, in Bristol; Central Birmingham B1 and London's West End.

For expert advice on the unfair dismissal cap, speak to Davies and Partners Solicitors Today!

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