News

Lifting unfair dismissal compensation cap is essential to deter unfair employer practices

5 December 2025

Responding to the government’s amendments to the Employment Rights Bill Prospect General Secretary Mike Clancy said:

“Lifting the cap on compensation was a critical trade union negotiating objective in the agreement on unfair dismissal reached with business last week, which is now reflected in these amendments. 

“To claim this compensation a worker must show real losses, and the vast majority of claims come nowhere near to these caps.

“However the caps have allowed some employers to ‘price in’ the cost of claims when deciding to fire people, and lifting them is an essential part of deterring unfair practices.

“Unions and business groups are clear that the deadlock must now end and parliament should now pass this amended Bill into law before Christmas.”

Read more about the deal that unions agreed to adjust the unfair dismissal protections in the Employment Rights Bill and prevent the bill from being further delayed in the House of Lords.