Cable sparks row with call for talks on easier sackings

Business Secretary Vince Cable said he wanted views on the idea of “no-fault dismissal” for small firms with fewer than 10 employeesunder which someone could be sacked with payment of a set amount of compensation.

Mr Cable admitted he was “sceptical” about the idea and needed to be persuaded, but he said there was an argument that firms would recruit more staff if it was easier to sack them.

“Not all jobs work out for both parties – the staff member doesn’t quite fit or simply the relationship has irretrievably broken down, and for micros in particular, who often don’t have legal or HR teams, the process to let a staff member go can be a daunting and complicated process.

“We want to give businesses the confidence to hire new staff and make sure when a dismissal needs to be made, they aren’t tied up in red tape. This is an effort to see how extensive the problem is and shed some light on the desire for a change to the rules.”

He told the British Chambers of Commerce national conference that he wanted views on whether dismissal could be made “simpler, quicker and clearer” without weakening job security.

The Government said the idea was that small firms would be able to dismiss a worker where no fault had been identified on the part of the employee.

Business groups welcomed the announcement, but unions warned that workers would be “horrified”.

John Longworth, director general of the BCC, said: “Employers have long argued that rules around dismissal do not work for business, so a new no-fault dismissal route would be an extremely positive step forward, and would send the message that the Government is serious about deregulation.”