Business News 22 Jan 2013

Business backs new cap on unfair dismissal

Business groups have welcomed a package of measures designed to reduce workplace disputes, including a proposed cap on unfair dismissal payments.

Publishing its response to the consultation 'Ending the Employment Relationship', the Government has confirmed that, subject to state approval, the maximum compensatory award for unfair dismissal will be restricted to one year's salary.

However, there are no plans to change the overall limit of the cap, which currently stands at £72,300 and is due to rise to £72,400 in February.

According to the Department for Business Innovation & Skills, just one in 350 people who make a claim for unfair dismissal receive an award of more than their own salary, and the average award is less than £5,000.

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