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Changes To Unfair Dismissal Pay-Outs Do Not Go Far Enough...

18th January 2013 Paul Andrews

The Institute of Directors thinks more could have been done

Commenting on the publication of the Government’s response to the consultation, ‘Ending the Employment Relationship’, including changes to compensation for unfair dismissal claims, Alexander Ehmann, Head of Regulation at the Institute of Directors, said:

“Business will welcome the 12 months’ pay cap for unfair dismissal claims as evidence of progress towards a more balanced system. But they will be disappointed that the Government has refused to reduce the overall cap from its current unnecessarily high level of £72,000. Two-thirds of businesses who responded to the consultation felt the cap was too high. Most successful claimants receive less than £5,000 in compensation, and leaving the cap so much bigger than this only helps to create unrealistic expectations, and encourage tribunal cases which could be sorted out more quickly and easily before that stage.”

Family businesses are likely to welcome the changes to compensation levels but the cap remains sufficiently high to encourage claims to be filed that add to the burden faced by family businesses on a regular basis.


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