Last week the Government announced it is seeking views on whether a system of “no fault” dismissals for businesses with fewer than 10 employees could work. The Government also announced the publication of a “call for evidence” on whether current dismissal procedures are too complicated and burdensome for employers, and whether the process is in need of a radical makeover. In addition.

George Osborne hinted at the introduction of such a system when he addressed the manufacturers’ association EEF last week.  This could potentially mean, a no fault dismissal process enabling employers to:

• dismiss workers where no fault had been identified by simply paying a fixed amount of compensation.
• fire someone where the relationship just hadn’t worked out , but at the same time would give the employee compensation to cover lost wages while they tried to find another job.

As for the call for evidence, Vince Cable referred to there being ‘room for improvement’ in the current system – no doubt further evidence of the Government’s commitment to help cut business red tape and have more freedom to hire and fire. This is particularly relevant for small businesses which often don’t have an HR function and may find the dismissal process daunting. This call for evidence goes hand in hand with the Government’s package of reforms, which includes increasing the qualifying period for unfair dismissal claims from 1 year to 2 years as of 6th April, and an overhaul of the Employment Tribunal system.

It is interesting that the CBI has welcomed the announcements, saying that the reforms should work well for both employers and employees.

What do you think?  Is the proposed change regarding a no fault dismissal process a good or a bad thing?

If you’d like to be kept up to date with all of the proposed employment changes, sign up for our employment updates.