Compensation for no-fault dismissals is unnecessary, warned the Chartered Institute of Personnel and Development (CIPD).Watering down employment laws to allow such awards will damage employee relations and it will not encourage firms to hire more workers, the CIPD argued in its response to a Government consultation.
The call for evidence asked for views on the impact of introducing compensated no-fault dismissal for micro employers, those with fewer than 10 members of staff. It is thought that the threat of unfair dismissal tribunals is preventing businesses from hiring staff.
However, Mike Emmott, Employee Relations Adviser at CIPD, pointed out that even in the Coalition’s own research, unfair dismissal does not feature in the top 10 regulations discouraging recruitment.
He said the concept, which stems from Adrian Beecroft’s report into employment legislation, is objectionable.
“It would be a licence for bad practice in managing people,” commented Emmott. “It is unnecessary because employers facing a possible tribunal claim can already offer the employee a compromise agreement, and tailor the level of compensation to the particular circumstances.”
According to Emmott countries that already exclude micro firms from unfair dismissal regulations have seen little improvement in growth, suggesting that it is unlikely that the UK will see any benefit.
The Government’s response to the consultation is expected to be published later this year.
