No-fault Dismissals Hint from Chancellor

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In a speech during a dinner of the manufacturers’ organisation EEF on 6th March, Chancellor George Osborne suggested the possibility of the introduction of compensated no-fault dismissals for what he called “the smallest businesses” in an attempt to protect employers’ rights. 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 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.” The Government has not yet published details of its proposals but it is anticipated that they would permit companies with up to 10 employees to dismiss an employee with notice pay without the employee being able to file a claim for unfair dismissal. A leaked report to the Government by Adrian Beecroft contained the suggestion for “compensated no-fault dismissals” and in November last year, Vince Cable, Business Secretary, confirmed the proposal in a speech at another EEF event. The full speech can be found here

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