The Government has today produced its response to the two major consultations which have been taking place on changes to Employment Law.
Two significant changes will be made.
Firstly the Government intends to introduce a 12th month pay cap on the compensatory award for unfair dismissal. The statutory cap will still apply. For example, in relation to somebody earning £20,000 net a year the cap would be £20,000 net. For somebody earning £100,000 net a year the cap would be the statutory cap (at the moment £72,300).
Secondly, the Government has also announced that it will repeal the provisions relating to service provision changes contained in the Transfer of Undertakings (Protection of Employment) Regulations 2006. Much of the law in this area is reserved to Europe and therefore out with the jurisdiction of the UK Parliament. However, the legislation relating to service provision changes is domestic and therefore falls within the power of Westminster. Whilst news of the repeal will be welcomed by many, there is a real risk that the uncertainty which prevailed before the service provision change provision was made will return.