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Government to look at “no fault dismissals” for smaller firms

The Government has issued a call for evidence to gather views on whether or not to allow smaller firms to dismiss staff without explanation.

At a speech at the Engineering Employers’ Federation in London yesterday, Business Secretary Vince Cable agreed to consider the case for “no fault dismissals” for small companies employing fewer than 10 staff.

He said: “We are seeking views on a proposal to introduce compensated no-fault dismissal for micro firms – that is those with 10 or fewer employees. Now I stress that we are seeking evidence on both sides. We don’t want to dent job security and consumer confidence and we have to seek a balance here.”

The idea was promoted in a report by Adrian Beecroft, a venture capitalist, commissioned by Steve Hilton, David Cameron’s policy adviser.

Deputy Prime Minister Nick Clegg is known to be against the policy, while Cable said he has so far not seen evidence to support its introduction.

Cable said he was “very responsive” to the advice of Lord Heseltine, the former Tory Industry Secretary, who warned against making it easier to sack workers.


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. If this scheme goes ahead, I think it is important that all applicants prior to accepting a position are made fully aware in writing that they will have less protection if they are employed by a small firm than by a firm employing more than 10 staff. Potential employees may think twice about being employed by such a firm.

  2. Toddy – nice idea, but if you need to job to feed your kids and put a roof over your head, and it’s the only job going, then what are you going to do?

    I thought it was only in Third World countries where you had an intimidated workforce with no restriction on the hours they can be asked to work (48 hour restriction going) and who can be fired at the whim of a manager with no explanation required.

  3. Strummerville
    No not at all, not only third world
    UK IFAs’ are an intimidated workforce with no restriction on the amount of work the fsa can impose on them whether it be tcf cpd rdr and on and on and on.Nor is there any limit on the amount of cash it can demand of them.
    They can be closed down at the whim of the regulator who may simply not agree with the firms business model.The IFA would then have no recourse to an oral hearing and to cap it all no time limit is placed on the regulator being able to pursue the IFA for whatever form of wrongdoing perceived ot otherwise.
    I think that is up there with the banana republic dictators.In fact it probably beats them hands down.

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