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Vince Cables Employment Law Reforms

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The Secretary of State for Business, Innovation and Skills has outlined various proposed reforms to employment law - most importantly in the form of consultations on capping the unfair dismissal compensatory award, it will not be introducing ‘no-fault dismissal’ for micro businesses and the introduction of 'settlement agreements'.  

Read the press release

The Government has also issued consultations on lowering the cap on unfair dismissal awards and Mr Justice Underhill’s proposals for reforming employment tribunal procedure. Read the consultation ‘Ending the Employment Relationship’

To sumarise the reforms:

  • Unfair dismissal compensatory awards – limiting awards to the lower of 12 months’ pay or the statutory cap - the Government is considering reducing the current £72,300 cap to annual median earnings (approx. £25,900).
  • Compromise agreements – to be renamed Settlement Agreements, the Government will provide statutory guidance, template letters and a model settlement agreement, to help employers save time and money in reaching settlements.
  • streamlining the Employment Tribunal rules – in light of Mr Justice Underhill’s recommendations, which include new case management powers for tribunals to weed out weak claims and reduce the number of preliminary hearings.

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For further information please contact Employment Solicitor Susan Mayall using the details provided below.

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

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