EEF plea to scrap ‘no-fault dismissal’ reforms

The Government is calling for evidence on compensated no-fault dismissals for firms with less than 10 staff, an idea proposed by venture capitalist Adrian Beecroft. Evidence on the matter must be submitted by tomorrow.

In its submission, EEF, the manufacturers’ organisation, said the concept of compensated no-fault dismissal commands little support from industry, and has ‘limited’ benefits. EEF called on the Government to refocus its efforts “on the areas of employment reform that will deliver genuine benefit for business”.

It also believes that the proposals risk undermining the gains that employers have made in increasing flexibility and productivity by working more collaboratively with their employees.

Andy Tuscher, regional director for the EEF, the manufacturers’ organisation, said: “The Government is right to focus on making our labour market more flexible but the case for no-fault dismissal is far from proven. We’ve found little support from industry for introducing no-fault dismissal, its benefits look pretty limited and we’ve seen no evidence that it would increase recruitment.”

He added: “We are concerned that the controversy over no-fault dismissal is distracting attention from the issues that really matter to business. The Government has many good ideas on collective redundancy, employment tribunals, TUPE and compromise agreements and it now needs to get on with implementing them before moving any further on no-fault dismissal.”

Business Secretary Vince Cable has condemned the proposals as “the wrong approach” and labelled the plan “counter-productive”.

Meanwhile, Tory MPs have spoken out in favour of the change, which they said would encourage businesses to hire workers by removing the worry that they may not be able to afford to get rid of them if they do not perform.

EEF has issued a five point plan for employment reform:

n Accelerating plans to reduce the 90-day consultation period for collective redundancy 30 days.

n Delivering on commitments to reduce the number and length of employment tribunals by streamlining the process, making greater use of conciliation and requiring claimants to lodge fees ahead of making a claim.

n Simplifying TUPE regulations to allow employers to harmonise terms and conditions of employees a year after the transfer of the business has taken place.

n Helping employers to manage performance by introducing protected conversations which give employers a safe space to discuss performance issues with employees without triggering legal action and making it simpler to reach compromise agreements if the employment relationship has come to an end.

n Clarifying its plans for shared parental leave and ensuring that any such system is kept simple to operate.