A ruling by the House of Lords opens the way for sacked employees to claim much more than the maximum unfair dismissal compensation of£51,700.
Since the 1970s, employment tribunals have made awards to unfairly sacked employees for financial loss only. Now the law lords have said in the case of Johnson v Unisys Ltd that there is nothing to stop tribunals awarding compensation in appropriate cases for distress, humiliation, damage to the employee's reputation or damage to family life.
The judges gave no guidance on which cases might be considered appropriate, or how high the damages should be. But most sackings will cause distress, humiliation and damage to family life, and the dismissal of a doctor, for example, is bound to harm his reputation.
Some clue as to the size of awards may be drawn from discrimination cases, where damages for injury to feelings are frequently awarded. Until recently, these were small, but now awards of£10,000 or more are common.
The law lords ruled in the Johnson case that employees who were wrongly sacked could not get round the cap on unfair dismissal compensation by bringing court proceedings for breach of the implied term of trust and confidence in the employment contract. But employees who are wrongly suspended rather than sacked may be able to succeed in such a claim.