Government to call for evidence on "compensated no-fault dismissals"

Chancellor George Osborne has announced the imminent publication of a call for evidence on "compensated no-fault dismissals" for small businesses. The Government has yet to set out the details of its proposals, but it is expected that they would allow employers with 10 or fewer employees to dismiss an employee with notice pay without him or her being able to bring an unfair dismissal claim. 

The suggestion for "compensated no-fault dismissals" was originally contained in a leaked government report from Adrian Beecroft. In November 2011, the proposal for "compensated no-fault dismissals" was confirmed by the Business Secretary, Vince Cable, in a speech on reforming employment relations (on the BIS website), made on 23 November 2011. 

George Osborne confirmed in a speech to the Engineering Employers Federation (EEF) on 6 March 2012 that the Government was "beginning a call for evidence on the case for a new compensated no-fault dismissal for our smallest businesses". 

The proposal is one of a number of employment law proposals designed to reduce the burden on employers and boost economic growth. Others measures include increasing the qualifying period for employees to bring an unfair dismissal claim from one to two years for employees who start work with their employer on or after 6 April 2012. 

The terms of the call for evidence are still to be published. 

• Speech by Chancellor George Osborne (on the News Distribution Service website) Read the full speech from George Osborne at the EEF Manufacturers' Dinner 2012, in which he announced a call for evidence on "compensated no-fault dismissals". 

Also

Podcast: "Radical" employment law reform; and employee engagement On this XpertHR Weekly podcast, we are joined by special guest, employment law expert and consultant editor, Darren Newman, who shares his thoughts on various proposals, including: "protected conversations"; employment tribunal fees; financial penalties for employers; and no-fault dismissals for micro-firms. 

Compensated no-fault dismissals: Osborne calls for evidence Michael Carty gathers reaction to George Osborne's speech on the XpertHR Employment Intelligence blog.