Judicial Review on Unfair Dismissal Cap Dismissed

On 29 July 2013 the Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2014 came into effect. 

The upshot of this Order is that the compensatory award in unfair dismissal proceedings will now be limited to 1 year’s gross salary (or to the statutory cap on compensation, £76,574 (as of 6^th April 2014), whichever is the lesser amount). 

At the end of 2012 the London-based employment law firm Compromise Agreements lodged a Judicial Review Application for this Order to be reconsidered.

The founder of the firm, Mr Alex Monaco of Counsel, asserted that the new cap on compensation would disproportionately affect older people as they were, previously, most likely to receive more than a year’s salary in compensation due to increased difficulty in finding another job and thereby mitigating their loss.    

However, on Tuesday 13^th May 2014, the High Court dismissed the Judicial Review Application at a Permission Hearing.

In a recent statement Mr Monaco stated that he is currently “looking at options and looking at appealing [the decision]”. 

As a firm, we are of the collective opinion that the new cap is yet a further example of the current government’s deliberate erosion of fundamental employment rights.

In other news the Trade Union, Unison, is also currently challenging a High Court ruling (made back in February 2014) which rejected a request for a Judicial Review of the Government’s decision to introduce Tribunal fees, (fees which also came into effect on 29 July 2013.)

Recent statistics show that, since the introduction of Tribunal fees, the number of employment law claims has dropped sharply, with a 79% fall in the final quarter of last year compared with the same period in 2012. 

A recent written answer in the House of Commons has also revealed that only 24% of remission applications (i.e. applications for reduced fees) made between the introduction of Tribunal fees on 29th July and 31st December 2012 were granted (in full or in part). To place this in context, these figures evidence that remission has been granted in only 5.5% of the 9,305 single claims and 1,519 multiple claims that were issued in the same period. This is significantly lower than the Ministry of Justice’s initial prediction, prior to the onset of fees, when they stated that around 69% of Claimants would qualify for remission, either in full or in part.

Chris Ridley - Solicitor

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