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changes are afoot

18 January 2013

Yesterday the government made a number of important announcements relating to its ongoing employment law reforms. The key points are:

  1. There will be a cap on the compensatory award for unfair dismissal of 12 months’ pay. The statutory cap (currently £72,300) will still apply if 12 months’ pay is greater than the cap.
  2. A consultation on extensive amendments to TUPE including the removal of Service Provision Change provisions.
  3. ACAS will publish a draft statutory code of practice on how settlement agreements will operate including template letters.

Employers, in particular those involved in contractor changes and businesses disposals, are likely to welcome these reforms. The changes to compensation are intended to provide more certainty as to the ultimate value of a claim. So far as TUPE is concerned, no one doubts that employees should be protected when there is a disposal of a business, but for a long time the service provision change provisions have been criticised because they go beyond EU minimum requirements.

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