The Government has decided to publish venture capitalist Adrian Beecroft’s leaked report on employment law. The report, commissioned by the Department for Business, Innovation and Skills rather than the Prime Minister as had been reported, was completed in October 2011 and recommends, among other things, the introduction of ‘compensated no-fault dismissal’ for all businesses.
In relation to the law on unfair dismissal the Beecroft report calls for the introduction of ‘compensated no-fault dismissal’ for all businesses, and exemptions from unfair dismissal law for small businesses with fewer than 10 employees. The report claims that ‘making it easier to remove underperforming employees will in the short run not increase unemployment as they will be replaced by more competent employees. In the long run it will increase employment by making our businesses more competitive and hence more likely to grow’.
Business Secretary Vince Cable, who was not present during the debate, subsequently released a statement which seemed designed to end speculation that the Government will introduce no-fault dismissal for all businesses. Mr Cable firmly states that, in his conversations with businesses, no-fault dismissal ‘has very rarely been raised with me as a barrier to growth’ and that businesses ‘are much more concerned about access to finance or weak demand’. Mr Cable will be examining the case for no-fault dismissals when the Government’s current call for evidence on the introduction of compensated no-fault dismissal for micro business closes on 8 June 2012.
We will keep you informed of any developments.
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