Ministers are consulting on proposals made to make dismissal of employees easier for employers with 10 staff or less. Vince Cable, the business secretary, launched the consultation with a view to making it easier for employers to sack members of staff. However, Cable pointed out that “strong evidence” was required to make such a step justifiable.
The proposal to fire staff without proving fault, as long as compensation is paid, would be welcomed by businesses who believe the step would boost employment and reduce the costs of employment tribunals. Trade unions disagree entirely, saying that it wouldn’t be beneficial to economic growth. The business secretary considers the fear of not being able to dismiss an employee prevents businesses from recruiting staff.
Employment disputes cost an average of £4,000 each over a period of six months, with over 200,000 disputes reaching tribunal annually. Vince Cable said that this situation had to be made “simple, quicker and clearer” although job security should not be impeded. He added:
“We are seeking views on the concept of ‘compensated no-fault dismissal’ for business with fewer than 10 employees. But let me stress that no decisions have been made to go down that path.”
The chairman of the Federation of Small Businesses, John Walker cites the complexity of employment law, and the complex dismissal process can prevent businesses recruiting staff. However, Brendan Barber, general secretary of the TUC believes that the economy won’t benefit from the proposed moves. Employment law is complex, and the knowledge of low cost accountants is necessary to stay within legislation.