UK pro-austerity government to cap unfair dismissal payout




Isn’t it curious how wage earners somehow need to be controlled and limited yet the most abusive people – the 1% – are not being asked to sign up for similar controls? It wasn’t the middle class that caused the economic crisis so why are they always on the front line of cuts?

There’s nothing fair about this, at all.

The maximum £72,000 [$117,000] compensation cap for unfair dismissal is to be slashed as part of a package of measures designed to remove disincentives from employers to take on new staff. The new cap may be set at the employee’s annual salary, or another lower figure.

Vince Cable, the business secretary, thinks the current maximum – though awarded in only 1% or 2% of cases a year – deters employers from hiring staff. The current median award is only £5,000 to £6,000, with just 6% of cases leading to awards over £30,000.

Cable has resisted pressure to adopt compulsory no-fault dismissal – a proposal advanced by Adrian Beecroft in a report commissioned by David Cameron and given near totemic status by the Tory right.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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