A number of important employment law reforms are planned for this summer. Behind three of them is the Government’s desire to reduce the volume of tribunal litigation in favour of alternative methods of dispute resolution.

1. 25 JUNE 2013: POWER TO FURTHER LIMIT CAP ON UNFAIR DISMISSAL COMPENSATION -

In line with other years, in 2011/2012 the median unfair dismissal award was £4,560 and the average £9,133. Given this, the Government believes that the statutory limit for unfair dismissal claims (currently £74,200) suggests an unrealistic award amount. Therefore, from 25 June 2013, the Government has the power to limit the compensatory award for unfair dismissal further by capping it at the lower of 52 weeks’ pay or the current statutory limit. A week’s pay for these purposes is based on the statutory definition which means that, generally, the maximum award will be a year’s gross salary excluding pension contributions, benefits and discretionary bonuses. A statutory instrument implementing the new rule is expected to come into force this summer.