A newly introduced cap of one year’s salary for compensation for unfair dismissal is to face a High Court challenge.  

London employment firm Compromise Agreements said this week it is seeking a judicial review of the cap, which came into force on 29 July under the Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013.   

Today the High Court is also expected to hear the final part of a judicial review brought by trade union Unison, challenging the government’s introduction of employment tribunal fees. The court is expected to make a decision this month.

Barrister Alex Monaco, founder of Compromise Agreements, said the cap on compensation will disproportionately affect older people, as they are most likely to receive more than a year’s salary due to difficulty in finding another job.

Monaco (pictured) said this could cost the government more in benefits payments.   

Previously the cap was for three years and a maximum of £74,200. ‘However, it was rare for anyone to receive more than two years,’ said Monaco.

Older people on low incomes are unlikely to be able to find representation under the changes, as the compensation would be too small, he said.

Compromise Agreements applied for the review after failing to get assistance from other parties, Monaco said. ‘Despite being employment lawyers, rather than public law or JR specialists, it became clear that if we didn’t do it, no one would, and we felt it our public duty to act.’

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