The business secretary Vince Cable is set to cut the maximum £72,000 compensation cap for unfair dismissal as part of a series of measures designed to encourage businesses to recruit more staff.
The Liberal Democrat believes the current maximum figure, which is only awarded in a tiny percentage of cases, may be reduced to be nearer to the level of the employee’s annual salary. The current average award in successful unfair dismissal cases is between £5,000 and £6,000 with only about 6% of cases seeing awards over £30,000.
However, the business secretary will not support moves to adopt compulsory no-fault dismissal, which was proposed by Adrian Beecroft in a government backed report and which had the support of many on the Conservative back benches. Instead Cable is thought likely to put his weight behind a voluntary scheme signed by both employer and employee, that would enable the staff member to leave the firm with a good reference as long as they waive the right to pursue an unfair dismissal claim at a tribunal.
Cable said: “We have been looking across the range of employment laws with a view to making it easier for firms to hire staff while protecting basic labour rights.”
https://www.theguardian.com/law/2012/sep/14/unfair-dismissal-compensation-...