An employment law firm which represents claimants has applied for permission from the High Court to apply for a judicial review of the recent cap on compensatory awards in unfair dismissal cases (i.e. the lower of £74,200 or one year’s pay)
Compromise Agreements Ltd (CAL) argues:
That one year’s salary cap will primarily affect workers on the lowest incomes and older people who are more likely to be out of work for more than a year following an unfair dismissal.
That where an unfairly dismissed claimant is unable to find work for over one year, the state may actually end up supporting that claimant in the form of benefits, rather than the employer being made to meet its responsibility for the loss as a result of the unfair dismissal.
Finally, CAL is claiming that the Department for Business, Innovation and Skills’ (BIS) impact assessment was fundamentally flawed because the survey was based on people who only participated in the study for a single year, which CAL claim prevented the BIS from making ‘a lucid and informed opinion’ on the length of time people remained out of work for, particularly in relation to the older work force.
CAL is seeking a quashing order of the introduction of the one year salary cap or in the alternative, declaratory relief to give effect to such findings as the High Court may make.
At the same time, CAL has also applied for a protective costs order given that if it loses the case, it could potentially face an adverse costs order of significant costs.
This will no doubt be an interesting one as it develops and I will certainly be watching this space.