than UK employment law " and that the idea of settlement agreements is " legally fraught " and risks " making a bad problem worse ".
The proposals also came under fire in both the House of Commons and the House of Lords . Baroness Dean noted that employers are likely to take some form of legal advice before offering a settlement agreement , but employees may have no prior knowledge of their boss ' s plans and so will not have taken the same precautions . Lord Monks described the changes as " Beecroft- Lite " and warned there was a risk the Bill would be extended to allow financial settlements to be exchanged when people were dismissed , even without any dispute having preceded this event and no claims made for compensation .
Indeed , Labour MP Ian Murray , who led the opposition in a Commons debate on December 6th 2012 , pointed out settlement agreements could be used to move employers from a normal employment contract to a new employee-owner contract , which would then allow employers to dismiss their workers without cause and without fear of being taken to a tribunal .
At IER conference Workplace Issues : Learning from the frontline in March 2013 , Senior Employment
Employee-owner contracts Employee-owner contracts were brought into law on the same day as the ERRA , as part of the Growth and Infrastructure Bill . Also known as the sharesfor-rights scheme , the contracts provide workers with £ 2,000 in shares in their organisation in exchange for their forsaking the following fundamental employment rights :
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The right to claim unfair dismissal The right to redundancy pay The right to request flexible working conditions The right to request training
Rights Officer at the TUC Hannah Reed said her organisation ' s main concern over settlement agreements is that they could take place before disciplinary procedures . She recommended that trade unions advise their members to refuse such approaches and insist on trade union representation .
The encouragement of settlement agreements is disturbingly close to Beecroft ' s ' no-fault dismissal ' recommendation ( in which workers could be paid-off when they are dismissed for no good reason ). Employers are more likely to have legal support before ' protected conversations ' than employees and the system is therefore vulnerable to abuse by employers who are hoping to settle ' out-of-court ' because they know their workers would be entitled to a much larger amount were they to make a legal claim against them .
Unfair dismissal compensatory award reduction Changes
Employees who are unfairly dismissed will receive less compensation , with the maximum award lowered from £ 72,400 to 12 months ' pay ( or whichever is lower ).
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