Employers warned over increase in cost of job loss claims

Employers are being warned to brace themselves for an increase in the cost of unfair dismissal claims due to a change in the law and the current economic downturn.

The maximum compensation that can be awarded is due to rise in February by 5% to £66,200.

The length and depth of the recession influences compensation payments, because the amount awarded is based on the length of time a previous employee that has been made redundant is out of work.

In the current economic climate this time period is likely to increase, which would see employers having to pay out a larger sum.