The Business Secretary, Vince Cable, has announced further proposals to reform the employment tribunal system with the aim of helping businesses.
The Government has already increased to two years the period for which employees must work before gaining unfair dismissal protection.
1. Tribunal award cap
Now it is proposed to cap the amount of compensation that employees can recover if successful to 12 months salary, or the current cap, whichever is lower.
In practice, very many awards are for less than this amount, with the average being around £9,000.
Note that the cap will not affect discrimination claims where awards are still unlimited.
2. Tribunal fees
The Government still plans to introduce fees for tribunal claims in 2013.
3. Dismissal conversations
The Government’s proposals also aim to enhance an employers ability to hold without prejudice discussions around employees potential departure without fear of unfair dismissal.