Plan to strengthen settlement agreements

A shake-up of employment law will see company bosses given greater legal protection when it comes to getting rid of under-performing staff.

In such cases, Vince Cable wants to bolster settlement agreements so they become widely used to resolve disputes. Under the proposals if the worker then accepts the payout it will become legally protected and therefore cannot be used as evidence in any court case or tribunal.

Another change will see workers face a significant cut in how much compensation they can win in unfair dismissal cases, with the Business Secretary planning to change the payout to a maximum of 12 months’ salary or set it at an even lower figure. His aim is to considerably reduce the current £72,300 cap in order to encourage small businesses to start employing more workers.

However, “no-fault dismissal” proposals made in the David Cameron-commissioned Beecroft Report are to be dropped after the business community expressed a lack of support for the reform.

IBB’s Employment Team provides advice on the employment aspects of all major business decisions. To contact a member of the team for advice, call us on 01895 207892 or email employment@ibblaw.co.uk