Dismissal laws discussed


16 March 2012

by Luke Thomas

A government consultation is currently underway to establish whether it should be made easier for small businesses to fire staff members.

The idea of “no fault dismissals” has been floated by Vince Cable, the business secretary, who is considering the idea but has stated that there needs to be “strong evidence” to show that it would be beneficial as a whole.

No-fault dismissals would permit businesses with 10 or fewer employees to fire whoever they desire, without having to prove that they have done something worthy of being sacked.

The ideology behind it is that companies would more readily hire new staff if there were less obstacles to getting rid of them if their employment did not work out. It would also reduce the cost of employment tribunals brought by ex-workers against their former employers.

Cable claimed that the government aimed to do away with the “perverse disincentives” to taking on new staff members. However, he also attempted to alleviate concerns, stating that “no decisions” had yet been made, and would not be made unless there was significant proof of the policy being a boon.

Many firms have backed the idea, with Federation of Small Businesses chairman John Walker claiming that “Employment law is complex, especially dismissals, and research shows that it can prevent small businesses from taking on staff.”

Representatives for unions have criticised the proposal, however, claiming that it will not help the UK’s economy. Many fear that going down this path could lead to reduced job security.

Cable acknowledged that the UK’s laws were currently “very accommodating” for businesses, and pledged to not take any action without evidence supporting it.

The consultation is part of a wider push by the government to simplify and reduce the rules governing the obligations employers have towards their staff, aiming to give businesses a boost in these tough times.

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