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The Department for Business, Industry and Skills (BIS) has launched a consultation “Ending the Employment Relationship” on proposals to vary the statutory limit on the compensatory award in unfair dismissal claims under powers contained in the Enterprise and Regulatory Reform Bill.
The consultation seeks views on the current level of the statutory cap and in particular whether it should be reduced. The discretion to reduce the cap would be a wide one; the Government could set the cap at an amount of between one and three times' median annual earnings (currently £25,882 - £77,646).
Views are also sought on the introduction of a secondary cap of 12 months' pay, meaning that the statutory cap could vary from employee to employee depending upon their earnings. There are no proposals to change the basic award.
The consultation is available here: http://www.bis.gov.uk/assets/biscore/employment-matters/docs/e/12-1037-ending-the-employment-relationship-consultation.pdf
Responses should be sent by 23 November 2012