The Government announced on January 17th that workers who win an unfair dismissal case from the summer onwards will receive a maximum payout equal to one year’s salary, as opposed to the previous limit of £72,300, which will rise to £72,400 next month.
However, in reality, the payouts will rarely be affected by the new maximum amount, as the average payout for an unfair dismissal is only around £5,000, with only one in 350 people receiving anything like the maximum. In fact, the median award given for unfair dismissal cases was £4,560 in 2011/2012.
The Business Department has said that the new cap is part of a raft of measures designed to make it easier for employers to sack staff who are underperforming.
Under the new “settlement arrangements” employers will be able to ask workers who are not performing well or who don’t fit in with the company culture to leave with a pay-off. The employer will then get legal protection against the dismissal being used in a tribunal.
Meanwhile under other plans to promote settlement of employment disputes without recourse to an employment tribunal, the Government has launched a consultation on the detail of the “early conciliation” process, which will require prospective claimants to send information about their claim to Acas prior to lodging a tribunal claim.
The Enterprise and Regulatory Reform Bill introduces a requirement for prospective claimants to contact Acas before being able to issue an employment tribunal claim. On receipt of the prospective claimant’s information, Acas will attempt to conciliate on the dispute and tribunal limitation periods will be suspended during conciliation.
The Government has also launched a consultation on proposed changes to the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations 2006. The consultation includes the proposal to remove service provision changes from the scope of TUPE.