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Averta's Alan Jones says cap will increase discrimination claims

The proposed employment law reforms being shaped by Vince Cable, who recently sought to emphasise his opposition to a ‘hire and fire culture’, will only lead to a rash of discrimination claims says Averta’s Alan Jones.

Jones comments: “The Business Secretary Vince Cable appears to have signalled the end of removing protection from unfair dismissal, with his comments at the Liberal Democrat Conference that “headbangers…who seem to find sacking people an aphrodisiac” have been seen off. He says that a “hire and fire culture” is totally irrelevant in a country with flexible labour markets which he says have created over a million private sector jobs in the last two years. “

Cable’s comments were made against a backdrop of a variety of reforms to employment laws, some of which are still under consideration and consultation. There will be fees for bringing a tribunal claim, and it may be that a cap is imposed on compensation for unfair dismissal at around a year’s pay. The details are unclear whether it is a year’s pay for the average employee, or a year’s pay for the actual claimant.

Jones continues: “ This particular reform seems a step too far when one considers that the average award for a claimant is around £5,000, so the only people who are likely to be affected are high earning managers and directors. So instead of bringing tribunal claims they may have to bring complicated and expensive High Court actions for recovery of damages. How will that reduce the proliferation of claims one wonders?”

“The more important point to note however that is there are no proposals to reduce compensation in discrimination or diversity based claims. So inevitably, a claimant who faces the prospect of severely limited compensation from the Employment Tribunal for unfair dismissal would tend to bring a claim based on age, race, sex or disability. That is not to say that claimants will “invent” claims but, with an aging workforce, and people finding it hard to secure a new position, it is inevitable that diversity based claims will increase.”

“Still the Beecroft proposal, commissioned earlier this year, which would have allowed companies to sack workers for a nominal pay-out (the so called “no fault dismissal” plan) has been quietly abandoned, so employees continue to have protection from arbitrary dismissal, at least for the time being.”


For more information please contact:

Alan Jones, Averta on 07970 495733, e -


Suzanne Orsler, SOPR on 07813 131350, e -

Note for editors:

Averta is a leading employment law firm. Averta's solicitors are specialists on matters affecting directors, senior executives and employees, managers, consultants and professionals.