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With effect from 29 July 2013, the level of the compensatory award which can be made by an Employment Tribunal for unfair dismissal, changes. At present, the cap on the compensatory award is £74,200. For any dismissal which takes effect on or after 29 July the cap on the compensatory award will be the lower of £74,200 or 52 weeks' pay. A week's pay will be based on the claimant's annual gross salary prior to their dismissal.

The average compensatory award is around £9,000, so it is questionable whether or not in practice the change will make much of a practical difference.

However where it may make a difference is in terms of managing expectations. Employees often seem to fixate on headline grabbing awards, which tend to be the exception rather than the rule.

The statutory cap will still not apply to dismissals for whistleblowing or discrimination claims. So the questions of the day are:

  1. Will the changes to the cap coupled with the introduction of fees, discourage claimants from bringing tribunal claims?; or
  2. Will the changes to the cap encourage spurious discrimination and whistleblowing claims in an attempt to position a potential claimant more favourably?

Sarah Rushton

Tel: 0207 539 4147

This is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information. 


Standout firm known for its personal insolvency work for clients including private companies, individuals and governmental institutions. Frequently acts for insolvency practitioners, assisting with the realisation of assets, both in the UK and abroad.

Chambers and Partners

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