Coalition to consult on ‘no-fault’ dismissals

The Government is set to launch a consultation questioning whether compensated, ‘no-fault’ dismissals could be used by the UK’s smallest firms, according to the Chancellor.

George Osborne revealed in a speech delivered to manufacturers’ organisation EEF that while workers should be offered protection, firms should not be “sued out of existence” either. He stated:

“Now we’re beginning a call for evidence on the case for a new compensated no-fault dismissal for our smallest businesses.”

Mr Osborne said it is likely that organisations including trade unions will take part in the consultation. As a result, he suggested that businesses should also share their views if they agree with the proposals. He added:

“If you think we should, and it will increase employment, then don’t wait for someone else to send in the evidence. Send it in yourself.”

Venture capitalist Adrian Beecroft included plans for a compensated no-fault dismissal system in a report which was compiled for the Government and leaked last year.

IBB’s Employment Team provides advice on the employment aspects of all major business decisions. To contact a member of the team for advice, call us on 01895 207892 or email employment@ibblaw.co.uk.