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• Neil Buck
• HR Updates
• June 30, 2012

‘No-fault’ dismissals dropped after lack of support

by Neil Buck

Only a third of firms supported Beecroft proposal (reported in People Management, 19th June) 

Our bulletin last month mentioned the Beecroft employment proposals. One of the proposals which aused much controversy as it would have made it easier for employers to dismiss staff through ‘compensated no-fault dismissals’.  However, it appears to have been dropped by ministers after it failed to win support.

The proposal, a key recommendation in the government-commissioned report written by the venture capitalist Adrian Beecroft, has been omitted from the Enterprise and Regulatory Reform Bill which is currently being debated in the House of Commons. A clause outlining new voluntary settlement agreements has now been inserted in its place, a move which is being widely interpreted as evidence that the no-fault dismissal idea has been killed off.

Note: There has been no official confirmation that the proposal is dead, but government sources revealed to newspapers that only a minority of businesses had supported it in a recent consultation. Of 135 employers who responded to the consultation, which closed on June 8th, only 38 per cent were reportedly in favour, with the rest opposed or unsure. Furthermore, only two of eight leading business groups backed the plans.

Comment: Many people in government, business and other interested parties had criticised the proposals as many thought it would have created a charter for bad people management. With the turnaround that this proposal may have been dropped as well as showing the importance of keeping up to date with employment law changes, it also demonstrates that consultations are important and that those who respond are listened to. If Government legislation is proposed and you have a view, let them know – don’t be shy! Remember - we ensure our clients keep up to date with employment law and have an easier life – if you’re not already a client, why don’t you become one?! Contact us on 0845 331 2325.