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.