The Chancellor is rumoured to be including plans to make it easier for small employers to “hire and fire” employees at will in his Budget to be announced on 21st March.
The idea of relaxing employment protection laws was put forward by Adrian Beecroft last year in his review of employment law. The Beecroft report proposed “compensated no-fault dismissals”, allowing employers to dismiss employees at any time without a reason by paying notice pay and a sum equivalent to a statutory redundancy payment.
In November the government announced a raft of potential changes, none of which went as far as the Beecroft proposals. It indicated that consultation would take place on introducing no-fault dismissals for employers with 10 or fewer employees only. The concept of “protected conversations” was also proposed, under which employers would be free to speak to employees about poor performance without the risk of the discussions being relied on in any subsequent tribunal proceedings.
There is no detail available yet, although it is being reported that George Osborne will issue a “call for evidence” on no-fault dismissals for micro-businesses. It would be a radical move to allow small employers to dismiss with impunity. Watch this space.
On March 5, 2012