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By Stephen Smith, Employment Solicitor

PAY-OUTS to employees who have been unfairly dismissed are likely to be limited to a year’s salary or a maximum of £25,882 under new Government plans.

Business secretary Vince Cable has announced a consultation on changes to the law to be brought in next spring which will cut by two-thirds the current upper limit of £85,200.

The coalition’s aim is to reduce the number of claims being brought, and they are also trying to achieve this by insisting from next year that conciliation is attempted through ACAS before the case goes to the Employment Tribunal.

Fees are also being introduced for cases for the first time in April, with simple unpaid wages cases costing £390, and larger ones such as unfair dismissal and discrimination costing £250 to start and £950 to take to a hearing.

There are concerns this will deter as many genuine cases as poor ones, as it will allow employers not to settle cases at an early stage, but to wait to find out if their former employee can afford to take further.

The rules on who can bring cases have already changed earlier this year, to extend the period for which employees have to work before they can bring unfair dismissal cases from one year to two.

However, the rules on length of service don’t apply to cases where it is claimed there has been an element of discrimination, such as where an employer decides to dismiss because an employee is pregnant or disabled.

*The Glasgow Law Practice acts for both employers and employees in employment law cases, and we offer a free, no-obligation discussion before we take on your case. Contact us at