Industry bodies have welcomed the proposals laid out in a leaked report authored by Adrian Beecroft, a venture capitalist.
The report, seen by The Telegraph, suggests that existing unfair dismissal rules are restricting the growth of small and medium sized enterprises.
Beecroft proposes replacing the current rules, which make getting rid of unproductive staff difficult, with another regulation, called Compensated No Fault Dismissal, which would allow employers to sack unproductive staff with basic redundancy pay and notice.
Commenting on the proposals, John Longworth, director general at the British Chambers of Commerce (BCC) said: “Too many companies, particularly small- and medium-sized businesses, tell us that dismissal rules and the fear of costly tribunal claims stop them from taking on staff. Over seventy per cent of firms see dismissal rules as burdensome to their business. At a time when we need all the business growth we can get, these fears must be removed quickly.
“A clear new dismissal route will help employers hire with confidence. We told ministers nearly two years ago that this was needed, and it’s encouraging to see such proposals receiving serious consideration at the highest levels of government.
“Ministers must act to bring forward Adrian Beecroft’s recommendation of Compensated No Fault Dismissal without delay, at the Autumn Statement. This new dismissal route will bring confidence to employers, and boost productivity in the workplace, which is good for employers, employees, and the economy.”
Supporting this stance, Simon Walker, director general at the Institute of Directors (IoD) said: “The IoD strongly supports radical change to employee dismissal processes and fully backs ‘Compensated No Fault Dismissal’ as part of a solution. Ministers would do well to act upon Mr Beecroft’s suggestions, freeing up wasted time and money from litigation and ensuring it is instead channelled into job creation and business growth.”
