George Osbourne has made the suggestion that no fault dismissals be introduced for “the smallest businesses”, namely businesses with fewer than 10 employees, as a means of protecting employers’ interests. A call for evidence has been made to allow the government to assess the impact of the idea.
Employers are often faced with the struggle of having employees who, whilst abiding by the rules and achieving targets, are perhaps doing just enough to keep themselves in their positions. Under current dismissal rules, an employer would have a hard time removing this type of employee. However, under new proposals the employer would be able to dismiss the employee in return for an agreed level of financial compensation.
The proposal has been made further to Osborne’s assertions that employers can currently be “sued out of existence” as they are forced to follow dismissal procedures or face a claim in the employment tribunal. As small employers try to stay afloat in these financial times, the risk of a tribunal claim from an employee who is unhappy or unmotivated within the company is a powerful hindrance.
Counter arguments have been made that employers will only be faced with claims if they act unfairly, and that the risk of vexatious claims within the tribunals has been addressed by the new fees system as part of the tribunal reforms. Under new rules, individuals have to pay a fee if they wish to bring a claim against their employers, a development which is intended to prevent claims from being brought unless they are genuine.
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Author: Emma Hamilton