Headteachers and deputies are becoming vulnerable to dismissal by governors and local authorities who can sack them unfairly with little financial penalty, according to a union leader.

David Hart, general secretary of the National Association of Head Teachers, said compensation for unfair dismissal is so minimal that employers regard it “cheap at the price” to get rid of his members on spurious and trumped-up charges.

In a letter to Margaret Beckett, President of the Board of Trade, he urges her to lift the cap on unfair dismissal compensation, bringing it in line with payments for racial and sexual discrimination.

He said her plan to increase the maximum award from pound;11,300 to pound;12,000 is still ludicrously inadequate, pointing out that the award has failed to keep up with the increase in the average earnings index and falls well short of the retail prices index.

“Higher-paid employees, such as heads and deputy heads are penalised heavily by the current maximum,” he said. “The average primary heads will earn pound;32,000 and the average secondary head pound;48,000 later this year.

“Employers will continue to regard the current maxima as cheap at the price and dismiss our members unfairly until they are faced with paying fair levels of compensation.” Mr Hart cited the case of Cherryl Pepper, who was sacked as deputy head of Montem first school, in Slough.

Mrs Pepper was accused of misleading the governing body into giving her a bigger pay rise than she was entitled to after being appointed acting head. She was sacked for alleged gross misconduct, and a governors’ appeal committee upheld the decision.

When Mrs Pepper took the case to an industrial tribunal she was exonerated. Her experience was described as the worst case of injustice against an employee in the 20 years’ experience of one of the tribunal members.

The governors were severely criticised, as was Berkshire education authority, which was ordered to pay compensation and costs totalling pound;16,879.

The school refused to reinstate her and she now works for the police force on a salary half of what she was earning as a deputy.

Mr Hart said: “There are dozens of cases like this, where our members are faced with either standing up and fighting injustice or trying to settle the matter and going quietly with the best deal they can. Even if you do win your case at the tribunal, the award you receive is totally inadequate.”