Call for evidence on dismissal procedures and "compensated no-fault dismissals"
The Government has launched a call for evidence on making the dismissal process "simpler, quicker and clearer" and introducing the concept of "compensated no-fault dismissals" for micro businesses.
The call for evidence focuses on two main issues related to dismissal procedures. First, it seeks evidence on whether or not the "Acas code of practice on disciplinary and grievance procedures" could be adapted to make it easier to use, stemming from concerns raised by organisations about dismissal procedures. The call for evidence explains that:
- some organisations do not believe that the language of the code is sufficiently accessible to small business;
- the code primarily relates to disciplinary issues related to conduct;
- some of the "backwards-looking actions" in the code are less relevant to forward-looking performance management processes; and
- some of the steps set out in the code are not practicable for smaller employers.
It also seeks views on whether or not a document similar to the Australian "Small business fair dismissal code" could provide greater certainty for smaller businesses.
The second part of the call for evidence deals with the concept of "compensated no-fault dismissals". It explains that half of businesses with fewer than five employees agree that employment laws deter them from employing staff. As a result, the Government proposes enabling businesses with fewer than 10 employees to dismiss an employee where no fault is identified on the employee's part, provided that the employer pays a set amount of compensation to the employee. The employer would not be required to observe a formal dismissal procedure. Employees dismissed in these circumstances would not be able to bring an unfair dismissal claim but would be able to bring a discrimination claim or an automatic unfair dismissal claim. Employers would still be able to dismiss employees without paying compensation where they had a fair reason for dismissal and acted reasonably in dismissing.
The call for evidence closes on 8 June 2012.
- Dealing with dismissal and "compensated no fault dismissal" for micro businesses (PDF format, 347K) Read the call for evidence and details of how to respond on the BIS website.
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