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No-fault dismissal plans expected to be shelved

Controversial plans for no fault dismissals are expected to be shelved after a lack of support from business leaders and resistance from Business Secretary Vince Cable, according to reports.

In November, the Government launched a consultation on whether employers with fewer than 10 staff should be able to dismiss staff without an explanation as part of a wider package of measures aimed and making it easier for firms to hire and fire workers. It closes on June 8th.

No fault dismissals were first suggested in a report by Adrian Beecroft, a venture capitalist, commissioned by Steve Hilton’, David Cameron’s policy adviser who recently left for a teaching sabbatical in California.

According to the Guardian, the consultation reveals a lack of support for the move among business leaders. Cable warns the proposal would leave a “dead hand of fear” hanging over employees.

While the prime minister has yet to give a public indication the move could be shelved, Government sources indicate that David Cameron is expected to allow the proposal to be dropped.

A source close to Cable says: “The last thing employees want is the dead hand of fear hanging over them losing their jobs.”

The Government has so far refused to release the Beecroft report which is though to outline a radical programme of Labour market deregulation. However, it was reported over the weekend that the Government will publish it this week after months of pressure to do so.

A leaked version of the report, published by the Daily Telegraph contains proposals to delay autoenrolment until the economy recovers and to exempt businesses with less than five staff from the initiative. It argues that 45 per cent of the cost of the Government’s employer compliance regime would come from around 800,000 micro-employers.

In February, the Government announced new staging dates for small companies after their implementation of auto-enrolment was delayed.

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