News & Views

Government “Call for Evidence” on compensated no-fault dismissals

BY Richard Woods
Employment law
BG Purple

As part of its strategy for overhauling employment laws, the Government has issued a consultation paper asking employers for their views on whether the law concerning dismissal should be changed.

The “Call for Evidence”, which can be found on the Business Link website, aims to collect views on how the Government can promote recruitment while protecting employee rights. The principal purpose of the consultation is to understand how businesses currently carry out dismissal procedures and how these should be carried out in future. In particular, it will consider what effect the ACAS code of conduct has had, and should have, on this process. 

As Employment Tribunal statistics consistently demonstrate, unfair dismissal claims are the most commonly raised complaint. The paper suggests that roughly 6.5% of all dismissals result in an unfair dismissal claim. Further, employers are likely to incur around £3,700 of costs as a result of legal fees and lost working time.

One of the key proposals contained in the paper, which was originally announced in November, suggests that “micro businesses”, i.e. those with 10 or fewer employees, should be permitted to dismiss employees on a compensated no-fault basis. The consultation paper states that “the Government recognises that micro businesses are likely to find it more difficult to access expert Human Resource and legal advice”. Accordingly, those businesses are more likely to be constrained by a fear of ending up in Employment Tribunals.

If you or your organisation wish to contribute to the consultation, log on to the Government’s Business Link website for further details. The consultation period will end on 6th June 2012.

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