Vince Cable will announce today plans to cut the compensation limit for unfair dismissal (currently £72,300).  The proposal is to cut this to an as yet unspecified amount or an amount representing 12 months’ salary.  The rationale is that this will give employers more confidence to begin hiring.

What they seem to be overlooking is the impact this will have on employees, particularly more senior employees on bigger bucks, who have (and lets not forget this) been unfairly dismissed.  Their compensation awards may fall far short of their actual financial loss leaving unfairly dismissed employees out of pocket.  Factor in the stress and time involved in getting to Tribunal, not to mention the costs of so doing, and this will be a huge deterrent to those who have genuine grounds for a claim.  Is this the government’s intention?  Surely not?  Lets also not forget that employers now have an initial two year window before employees can bring unfair dismissal claims anyway when they are free to dismiss poor performers or unsuitable employees without risk of dismissal claims.

Time to put the brakes on Mr Cable?  Any thoughts???