Legal rights are all very well, but they only really work if there is an incentive to observe them. The compensation limits in employment cases had become something of a laughing stock: some employers deciding it was cheaper to settle cases than obey the law.

On 25 October 1999 the position changed radically for unfair dismissal claims with the maximum compensatory award leaping from £12,000 to £50,000 if the employee had losses totalling this amount.

From 1 February 2000 increases across the board come into force for Employment Tribunal Claims:

  • the maximum amount of a week's pay goes up to £230 
  • the minimum basic award where an individual is unfairly dismissed for Trade Union or health and safety activities goes up to £3,100 
  • the limit on a guarantee payment goes up to £16.10 per day

The new limits have effect where the "appropriate date" falls after 1 February 2000. In most cases the appropriate date is the date of dismissal but in other cases is will be the date on which the act complained of took place.

As from 17 December 1999 the Secretary of State for Trade and Industry is bound by law to uprate awards annually in line with the Retail Prices Index. Awards will be uprated by a statutory instrument which has to be laid before Parliament before being made.

The awards which will be annually uprated in line with the RPI are:

  1.  guarantee payments payable in the event of "lay off" (Section 31 Employment Rights Act 1996) 
  2.  minimum amount of basic award for unfair dismissal for health and safety cases, shop and betting shop workers who refuse Sunday work, Working Time cases, Trustees of Occupational Pension Schemes and Employee Representatives (Section 120 ERA 1996) 
  3.  limit of compensatory award in unfair dismissal cases ( Section 124 ERA 1996) 
  4.  maximum amount payable on the insolvency of employer in respect of any week (Section 186 ERA 1996) 
  5.  maximum amount of a "week's pay" for calculating a basic award of compensation for unfair dismissal, additional award of compensation for unfair dismissal and a redundancy payment ( Section 227 ERA 1996) 
  6.  minimum basic award in a trade union dismissal (Section 156 TULRA 1992) 
  7.  minimum amount of compensation awarded by Employment Appeal Tribunal for right not to be excluded or expelled from a trade union (section 176 TULRA(C) 1992.

The mechanics of the uprating is contained in Section 34 Employment Relations Act and allows rounding up to the nearest ten pence, £10 or £100 depending on the sum concerned (ten pence for guarantee payments, £10 for maximum of a week's pay, and £100 for unfair dismissal minimum award, maximum compensatory award, trade union dismissal and right not to be excluded or expelled from a trade union).

The limit to the definition of "a week's pay" decreased in real terms year on year during the eighteen years of Conservative rule. Thompsons argued for the limit to be increased significantly before the introduction of statutory index linking of the figure. In this way the definition would reflect more accurately average weekly pay. This has not happened, but at least the levels can no longer continue to wither on the vine and the fruits of succeeding in an unfair dismissal claim will be sweeter.