Mike Emmott, employee relations adviser at the Chartered Institute of Personnel Development (CIPD), comments: “We know that employers don’t spend all their time worrying about unfair dismissal claims. In fact, according to the Government’s own research, unfair dismissal doesn’t even figure in the list of top ten regulations discouraging them from recruiting staff.
“Adrian Breecroft’s proposal for a system of compensated no-fault dismissal is objectionable and unnecessary. It is objectionable because it would be a licence for bad practice in managing people and damage the reputation of the whole micro-business sector. It is unnecessary because employers facing a possible tribunal claim can already offer the employee a compromise agreement, and tailor the level of compensation to the particular circumstances.
“Countries that have excluded small businesses from unfair dismissal regulations such as Germany, Australia and Spain have generally found it has failed to achieve the intended result. There is no evidence that no-fault dismissal would make a positive contribution to economic growth in the UK by encouraging the smallest firms to recruit more employees. Indeed, by increasing job insecurity and reducing employee engagement it would be more likely to damage growth.”