"The idea that the risk of tribunal claims discourages employers from hiring workers is nonsense," said General Secretary Paul Noon, on behalf of 120,000 professionals, managers and specialists. "The government has already raised the qualifying period for taking out an ET claim for unfair dismissal from one to two years' service. Far from stimulating the jobs market, making it easier to sack people will increase unemployment.

"In an abusive relationship the law should be protecting victims, not pushing the problem under the carpet.

"Capping the amount of compensation will make it even easier for bad employers to treat their staff unfairly. This measure is particularly unfair on middle-income earners and skilled professionals, who will lose out disproportionately if compensation payouts are capped to one year's median pay of £26,000.

"Procedures already exist to enable employers to deal effectively with those who under-perform or who commit serious acts of misconduct. These new measures will simply give bad employers yet more ammunition to pick on and discriminate against people they don't like while stripping employees of their ability to protect themselves. And there is worse to come.

"Most depressing of all, these measures will do nothing to stimulate economic recovery. They are simply irrelevant to the real issues facing the British economy."