Business Secretary Vince Cable has rejected the recently leaked report that recommended unfair dismissal be scrapped and replaced with 'no fault' dismissals.
The report, written for Downing Street by Tory party donor Adrian Beecroft, will not be made public and was claimed by Mr Cable's aides to be unofficial and not officially commissioned.
It stated that unfair dismissal claims are a great drain on business, especially in the public sector, since the fear of reprisal means that employers allow unsatisfactory employees to "coast along" without firing them.
The report says: "The rules both make it difficult to prove that someone deserves to be dismissed, and demand a process for doing so which is so lengthy and complex that it is hard to implement.
"This makes it too easy for employees to claim they have been unfairly treated and to gain significant compensation."
It recommends that "the employee should be given a chance to argue his or her case, and to suggest (but not demand) that they be given time to improve or be transferred to a less demanding job at a lower wage. If no such agreement could be reached, the employee would receive the same payment they would get if they had been made redundant."
However Vince Cable stated that these measures are "unnecessary, based on no evidence and unlikely to improve labour market flexibility".
Shadow business secretary Chuka Umunna said: "We've got 2.57 million people unemployed in this country.
"I find it absolutely extraordinary that the Government should be preoccupying itself with how it can make it easier to fire people when in that context it should be looking at how it can make it easier to hire people."
However, now that the idea has been revealed, there are those who support the report's suggestions. Simon Walker of the Institute of Directors believes that "ministers would do well to act upon Mr Beecroft's suggestions, freeing up wasted time and money from litigation and ensuring it is instead channelled into job creation and business growth."
You can currently claim unfair dismissal in the UK if your employer does not have a fair reason for dismissing you, if the correct procedure is not followed during your dismissal and if you were dismissed for an unfair reason such as being pregnant, your age or your gender.
Read more on the story (The Guardian)
Fair reasons for dismissal (FindLaw)
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