back

Employment law alert

Date: 08 Feb 2012

Citywealth

Tessa Fry, partner at GSC Solicitors, outlines the employment law alert for February 2012, which sets out new rates and other changes to unfair dismissal claims.

The year 2012 promises significant changes to employment law and practice.

These include the increase in the qualifying period for unfair dismissal and the introduction of fees and other reforms to the employment tribunal system with a view to reducing spurious claims. Although the ET reforms are yet to be finalised, other changes are now in force which impact on both companies and individuals, as set out below.

New rates for redundancy and unfair dismissal awards

The rates for statutory redundancy payments and unfair dismissal awards increased on 1st February 2012 and will apply to all dismissals after this date. The rates are as follows:

Unfair Dismissal Compensatory Award (maximum):

Award Previous Rate (applies to dismissals before 1st February 2012) was £68,400

Current Rate (applies to dismissals on or after 1st February 2012) is £72,300

One weeks pay for Statutory Redundancy Payment and Basic Award:

Award Previous Rate (applies to dismissals before 1st February 2012) was £400

Current Rate (applies to dismissals on or after 1st February 2012) is £430

Maximum Statutory Redundancy Payment and Basic Award

Award Previous Rate (applies to dismissals before 1st February 2012) was £12,000

Current Rate (applies to dismissals on or after 1st February 2012) is £12,900

Increase in qualifying period for unfair dismissal claims

From 6th April 2012, the qualifying period of service for unfair dismissal claims will increase from one to two years. At present, it is the Government’s intention that the two year qualification period will only apply to new joiners. This means any employees whose start date was before 6th April 2012 will only need one year’s service to bring an unfair dismissal claim.

The restriction to new joiners is subject to Parliamentary approval. However, employers who are currently recruiting should delay the start date to 6th April 2012. Conversely, any employees joining a new company should try to start before 6th April 2012.

back to news