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Employment lawyers are sparking a spate of dismissals, primarily in the City, as they advise clients to sack staff - sooner rather than later - before the Fairness at Work Bill comes in later this year.
Employment solicitors say dismissals have been increasing since late last year as a result of the impending legislation. Following consultation on the Fairness at Work white paper, the Government indicated in December that the Bill would raise the cap on compensation in unfair dismissal "from £12,000 to £50,000 and will henceforth be index-linked".
The Government says the current limit means there is no incentive for employers to avoid unfair dismissals.
Janet Gaymer of Simmons & Simmons and Jane Mann of Fox Williams are among leading employment lawyers, who are busier than usual with dismissal work.
"People are looking long and hard at potential dismissals in the light of the fact that the cap on compensation will be lifted," says Gaymer.
"It's just common sense really," says Mann. "One is pointing out to absolutely everybody what the coming change in the law is and, clearly, if one is an employer and has some long-standing problems [with an employee], then now might be a good moment to tackle them."
David Cockburn, of Pattinson & Brewer, says: "It's something that's being discussed and will no doubt increase in the City, but in the rest of the country [the raising of the cap] will not be of monumental importance."
He says he has seen no increase of cases himself.
Cockburn says it is not a simple matter to lay off staff if an employer wants to maintain a good reputation. And as only about 4 per cent of cases are awarded the current maximum of £12,000, employers may be wise to avoid a "macho" reaction to the Bill.