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.
