Knowledge

On Tuesday, 22 April 2025, the States of Jersey approved significant changes to the employment legislation, which have the potential to increase the cost of doing business in Jersey. 

As a result, we expect that leadership teams will be looking to review their policies and procedures and consider their training programs to minimise the risk of increased exposure to employment-related claims. 

In this briefing we provide an overview of the changes and provide our thoughts on the action you can take to ensure you are ready when the amendments come into force (which date is yet to be confirmed). 

Increase to the maximum amount to be paid as compensation for discrimination claims

The maximum compensation payable for employment-related discrimination claims will be set at the lesser of £30,000 or 52 weeks' pay, per act of discrimination, with a maximum award of £30,000 for hurt and distress.

Previously, compensation was capped at £10,000, with a maximum award of £5,000 for hurt and distress, so this is an increase of 300% (note that, although significant, it does not go as far as the Employment Forum's recommendation, which was the higher of £50,000 or 52 weeks' pay).  The sum of £30,000 will be reviewed at least every three years.

There is the potential that an employer could face a claim where the award could exceed £30,000, as this sum is the maximum per act of discrimination.

Depending on the nature of the allegations there could be more than one act, e.g. indirect discrimination and harassment. However, it is important to remember that the employee must be successful in their claim and the sum of £30,000 is a maximum amount and will only be awarded in the most serious of cases, likely to be where there has been an ongoing campaign of discrimination not a one-off act. 

Our top tips for employers to reduce exposure are: 

• ensure all employees are aware of their obligations under discrimination legislation and provide suitable mandatory training with regular updates, keeping records of attendance;
• foster a company culture which encourages people to speak up and where there is a zero-tolerance approach to discrimination;
• review and update policies and procedures to ensure they reflect best practice and do not inadvertently put a certain group of individuals at a particular disadvantage;
• ensure policies and procedures and business decisions are applied fairly and consistently across the board;
• provide general training for managers so that they have the skills to equip them to have difficult conversations and resolve conflict; and
• if faced with a potential claim, seek legal advice early on to discuss your options. 

Compensation for unfair dismissal 

The compensation for unfair dismissal will range from four weeks' pay for employees with one year's service to 36 weeks' pay for employees with 15 years' service or more. Previously, these claims were calculated on a sliding scale from four to 26 weeks' pay for employees with more than five years' service. 

In addition, the Tribunal will have a discretion to increase an award by up to 25% where the employer's conduct has been particularly blameworthy, so the range could potentially be five to 45 weeks' pay.  

It has always been open to employers to argue that a potential award to an employee should be reduced on the basis that their conduct contributed to the dismissal.

The Tribunal's guidance notes that in order to satisfy this test, the conduct must be culpable or blameworthy, so the discretion to uplift an award where the employer's conduct is blameworthy balances this out.

Our top tip to avoid this uplift would be to ensure that you follow a fair process prior to dismissal.

The requirement to give written reasons for dismissal

Under the amended legislation, an employer will be obliged to provide an employee with a written statement setting out the reasons for dismissal within seven days of an employee's last day of employment.

If an employer fails to do so, the employee may make a claim to the Tribunal, which may, if the employer has no reasonable excuse, order the employer to provide a written statement and, in addition, make a compensation award of up to eight weeks' pay to the affected employee.

This is a day one right, so it applies to all employees, even those on a probationary period. 

In our experience, employers in Jersey do not typically provide a written reason for dismissal in their standard leavers letters. Therefore, this new requirement is likely to necessitate a change to employers' current practices and could trip employers up and expose them to unfair dismissal or discrimination claims. 

To mitigate this, we recommend that you: 

• ensure you train your managers to have regular review meetings during the probationary period and throughout the employee lifecycle;
• address any performance or conduct issues early;
• be consistent and fair when applying policies and procedures to ensure employees are all treated the same;
• be honest and open in your communication and ensure that the reason you provide to justify any dismissal is unambiguous;
• update your leavers letters and processes to ensure the correct information is provided within the prescribed timeline.

Other changes

• The cap for a breach of statutory rights (e.g. breaches in relation to flexible working requests or certain rights in relation to pregnancy or breastfeeding, amongst others) has been increased from four weeks' to eight weeks' pay, which will result in a range of potential awards from zero to eight weeks' pay. 
• Compensation limits will be regularly reviewed and future changes to the maximum amount that may be awarded will be made by Ministerial Order rather than Regulations.
• The jurisdictional limit for contractual breaches of an employee's rights will be increased from £10,000 to £30,000.