Unfair dismissal payouts capped

Workers will face a cut in how much compensation they can win for unfair dismissal at employment tribunals. The Business Secretary Vince Cable is set to also announce he's dropping plans to make it easier to fire under-performing staff.

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Cable to unveil 'settlement agreements' for dismissals

  • Under the proposals if the worker accepts the deal it will become legally protected so it cannot be used later as evidence in any court case or tribunal.
  • Officials insist the move is fair to employees as they are not obliged to take the package and also incentivises bosses to offer a good package, which can include a binding promise of a favourable reference.
  • Mr Cable will also consult on plans to change the limit on unfair dismissal payouts to a maximum of 12 months' salary or set it at an even lower figure.
  • He wants to reduce the current £72,300 cap significantly in the hope of encouraging small businesses to start hiring more staff.

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