Chancellor George Osborne has launched a call for evidence on Compensated No-Fault Dismissals for "for our smallest businesses."
Back in November 2011, pages from a leaked Government report - written by venture capitalist Adrian Beecroft and reportedly commissioned by David Cameron - suggested that the right to claim unfair dismissal should be replaced by new "Compensated No Fault Dismissals"
in order to boost economic growth. See this post for more detail on the implications of Beecroft's proposals
Beecroft's proposals proved controversial
at the time. It was subsequently suggested that they could be limited to cover employees of "new micro-companies"
Some commentators suggest that Osborne's decision to call for evidence on Compensated No-Fault Dismissals for micro employers means they are now likely to become a reality.
Osborne: 'What about your right to start a business and not be sued out of existence?'
Speaking at the EEF Manufacturers' Dinner last night (Tuesday 6 March 2012), Osborne announced the call for evidence on Compensated No-Fault Dismissals
. He said:
Of course, employees have rights and should be protected. But what about your right to start a business and not be sued out of existence? And now we're beginning a call for evidence on the case for a new Compensated No-Fault Dismissal for our smallest businesses. Plenty of trade unions and others will be submitting their evidence for why we shouldn't do this. If you think we should, and it will increase employment, then don't wait for someone else to send in the evidence. Send it in yourself.Businesses to 'absolutely flood BIS' with evidence in favour of Compensated No-Fault Dismissals?
The Telegraph reports
that "employment minister Norman Lamb is unveiling plans this month which would remove restrictions on laying off staff at firms with fewer than 10 employees."
In a post on the Spectator's Coffee House blog, James Forsyth says that Osborne expects many employers to come out in favour of the Compensated No-Fault Dismissal proposals
, and that Compensated No-Fault Dismissals are likely to become a reality:
The fact that Osborne is personally throwing his weight behind the Beecroft agenda is striking. It suggests that he does regard making it easier to hire and fire as one of the keys to getting the economy moving again and as important enough to have a political fight over. Indeed, there is talk in Tory circles of trying to get businesses to absolutely flood BIS with responses to the consultation. I also suspect that Osborne's intervention means that this proposal is going to go through. The Chancellor tends not to waste his political capital on losing causes. What's your view on Compensated No-Fault Dismissals?
I'm extremely interested to find out what you make of the Compensated No-Fault Dismissal proposals. Are they likely to promote growth in 2012 and beyond (should they come into effect)? Please get in touch via the comments box below.
Read the complete post at http://www.xperthr.co.uk/blogs/employment-intelligence/2012/03/osborne-compensated-no-fault-d.html
7 Mar 2012 6:45 AM
XpertHR - Employment Intelligence
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