Proposed Reduction of the Maximum Unfair Dismissal Compensatory Award

The Enterprise and Regulatory Reform Bill, introduced into parliament on 23 May 2012, includes a power for the secretary of state to cap the compensatory award for unfair dismissal – currently £72,300 – at somewhere between one year’s national median earnings (around £26,000) and three years’ annual average earnings (around £78,000).

Alternatively, the Bill contains a power to limit the compensatory award to 56 weeks’ pay.