The government is to limit unfair dismissal awards to a year’s salary, employment relations minister Jo Swinson has said. She said the government had decided not to abolish the overall cap of £72,300.

Swinson said the government would not set guideline awards for settlement agreements (formerly referred to as compromise agreements) but had asked Acas to include template letters in its statutory code of practice, reports Solicitors Journal.

The changes take the form of amendments to the Enterprise and Regulatory Reform Bill, currently before parliament.

“Employment tribunals are costly for everyone, in terms of money but also time and stress,” Swinson said.

“We need to tackle unrealistic expectations about the levels of compensation awards, especially when only 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.”

Source : Solicitor’s Journal