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New unfair dismissal consultation

A government consultation has been launched, putting forward plans to cut the cap on compensation payouts (£72,300 as of writing) to a maximum of 12 months’ salary. An idea of “settlement agreements” has also been proposed, although how this would differ from “compromise agreements” seems unclear at this point.

Commenting on the plans, Business Secretary Vince Cable said “we acknowledge that more can be done to help small companies by reducing the burden of employment tribunals, which we are reforming, and moving to less confrontational dispute resolutions through settlement agreements.

In the meantime, this set of downloadable template employment termination letters may be of assistance in ensuring a smooth exit process. A letter with a compromise agreement is also available.

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