You're fired!

Watching the recent Apprentice final got me thinking: How many bosses dream of adopting Lord Sugar’s approach to sacking staff with just the point of a finger? 

This fast-track firing could become a reality for some, if the Government’s proposal for compensated ‘no-fault’ dismissals in small businesses with less than 10 employees goes ahead. 

The scheme, advocated by government advisor Adrian Beecroft, would mean that small employers could dismiss employees quickly by offering them a set amount of compensation.  Despite the label, ‘no-fault’ dismissals offer an obvious way out for small employers struggling to manage poor performance without the resources for lengthy dismissal processes.

It is certainly true that within the current legal framework, it is hard work and ultimately very difficult to dismiss employees, even if they are not performing.  So these measures are aimed at helping employers to get over their fears of taking on a new employee and then being stuck with them.

Clearly, as Vince Cable and other critics have pointed out, the whole thing could be seen as an excuse for poor management practice and an erosion of the employment rights built up by previous governments. But maybe after a decade or more of new employment legislation promoting employee rights, it is time for a swing back in favour of the employer? 

After all, these employees would still be able to bring claims for discrimination under the Equality Act 2010 and automatic unfair dismissal under the Employment Rights Act 1996. 

In fact, rather than chipping away at employee rights, the new system may do little more than create legislation around the current practice of dismissing with compensation through “without prejudice” conversations and compromise agreements.   

Far from creating the ‘simpler, quicker and clearer’ dismissal process sought by the coalition government, could the introduction of no-fault dismissals will further muddy the waters of employment legislation? Creating a different set of rules for smaller businesses who are already struggling to keep on top of a raft of legislation and employment duties may have an adverse effect.    

The fantasy of pointing your finger and saying ‘you’re fired!’ is still a long way from reality.