Cap for unfair dismissal payouts to be reduced

The current upper level limit for unfair dismissal claims stands at £72,300 and it is hoped that new measures under consultation to reduce this upper limit of compensation would help businesses and make it easier and cheaper for them to dismiss their staff.

The consultation will see no recommendation in what the new levels will be, however one suggestion has be to cap payouts at one year’ salary, as well as employment law reform to allow employers to pay off underperforming and/or negligent staff without the fear of a tribunal. Minister also hope that employers would have increase protection against tribunals by making it easier for them to offer ‘settlement agreements’ to an employee to leave a company with compensation in exchange for the legal protection.

It is also believed that the Department of Business will produce a ‘template’ agreement for companies to use in order to reduce the amount they need to spend on legal advice.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. 

Setfords Solicitors are a national full service law firm, with employment  Solicitors in Reading and across the country.