Draft Order to limit the unfair dismissal compensatory award

The draft Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013 has been laid before Parliament. It limits the unfair dismissal compensatory award to the lower of the existing £74,200 cap or 52 weeks' pay. The exact commencement date is not yet known, but it is expected to come into force sometime in July 2013, and will apply to all dismissals where the effective date of termination is after that date. 

The draft Order amends section 124(1) of the Employment Rights Act 1996 to replace the existing £74,200 cap with the ‘lower of (a) £74,200, and (b) 52 multiplied by a week’s pay of the person concerned’.