Criticism
In the IER ' s response to the government ' s call for evidence on the Enterprise and Regulatory Reform Bill , Anya Palmer highlighted that in the previous 18 months in which the Employment Law Review had been ongoing there had been no hint that the Coalition was planning to reduce compensatory awards for unfairly dismissed workers . Furthermore , no evidence - or even an underlying principle - had been offered to show there was truly a need for this change to the law .
" We do not understand why compensation should be arbitrarily limited . Claimants do not on the whole receive vastly inflated awards from tribunals . They only receive any compensatory award if they can demonstrate they have suffered financial loss , caused by the unfairness of the dismissal , and which they have fully mitigated so far as possible ," she pointed out .
Anya also highlighted that if compensatory awards were lowered for unfair dismissal cases , not long after the qualification period for claiming unfair dismissal rose to two years , there would be further incentive for claimants and their lawyers to try and find a discrimination or whistleblowing aspect to their case and go to tribunal on those terms instead . This would increase the cost of the tribunal system - the direct opposite of the outcome the government hopes from the ERRA .
In a House of Lords debate , Lord Young noted that the compensation cap is likely to have a disproportionately hard impact on older workers .
" The reality is that this cap will affect no more than around 150 cases a year out of some 50,000 - just 0.3 % of all unfair dismissal claims ," he stated . " However , among those 150 individuals who will be
Extension of qualifying period for unfair dismissal to two years Since April 2012 , workers have not been able to claim unfair dismissal if their employer sacks them unjustly before they have been working with the company for a minimum of two years . This means that , essentially , employers can dismiss their workers for no good reason at all without fear of legal retaliation for the first 24 months of a worker ' s contract .
denied full compensation , such as a substantial loss of pension rights , are people in the squeezed middle who were previously on above average wages , but perhaps are close to retirement and therefore have fewer prospects of finding new employment ."
Rather than reducing the cap on compensation for unfair dismissal claimants , the IER recommends raising it . As Anya explains : " This would be fairer to those who do not have a complaint of discrimination , only a complaint of unfair dismissal , and less divisive . It would also mean that those who do not really have a complaint of discrimination would have no incentive to find one ( subject of course to having sufficient qualifying service ). Demands on tribunal would be reduced in consequence ."
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