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Employment Law Expert Calls For Calm Over No Fault Dismissals

Government 'Calls For Evidence' Over Proposals


Business organisations and other employment bodies should not overplay the Government’s announcement on no fault dismissals and what it could mean for workers, an employment lawyer at Irwin Mitchell has urged.

Vince Cable yesterday (March 15th) announced that ministers were calling for evidence on the concept for smaller firms with less than 10 employees, with announcement gaining much attention across the board.

While some commentators including unions have criticised the proposals, which would allow firms to pay a set level of compensation to sacked workers and avoid a tribunal claim, bodies including the CBI have claimed the change should be brought into effect for all employers.

However, Tom Flanagan, national head of employment law at Irwin Mitchell, said there was a concern that some bodies are overstating the importance of Mr Cable’s announcement.

He outlined: “The announcement was based on three things – the Call for Evidence on dismissals, an update on the progress of the Employment Law Review and a review of the Employers’ Charter.

“So, ultimately, all that was announced in terms of no fault dismissal was that it would be one of the possibilities included in the 'Call for Evidence'. This is not a Consultation and there are no proposals. Like the recent similar such Calls in relation to Collective Redundancy and TUPE, it is an attempt to gauge a combination of views and evidence of practice, to help form a later Consultation Paper.

"BIS’s stated aim is to strike a balance between simplifying the process around dismissals, whilst preserving employment law rights such as unfair dismissal – an interesting balancing act!

“There is a range of measures which BIS is examining in this context, including “protected conversations” and simplifying Compromise Agreements (now to be called “Settlement Agreements).  So, the concept of no fault dismissal is one of a range of possibilities and not necessarily the favoured approach.”

Tom went on to explain that the whole announcement was also part of the ongoing Employment Law Review.

He outlined: “Some elements, such as the increase to two years of the qualification period for unfair dismissal, will come into force in April this year.

“Others will be developed throughout the year, such as a Consultation Paper on Collective Redundancy – following the Call for Evidence and expected in June 2012 – and the Underhill review of employment tribunal practice, being written right now.

“Therefore, whether a no fault dismissal system will be developed will depend, up to a point, on what is happening in the rest of the reform process, and not in isolation."

Tom added that the review of the Employers’ Charter is an interesting issue, as at present it carries little weight with employment lawyers, employers and employees.

He said: “It is a list of things employers are supposed to be able to do and not do, with links to other parts of the BIS website, which enlarge on the one-liner summaries. 

“For example, it says that it is acceptable for employers to ask their employees to take a pay cut. One might be able to ask but the potential legal and employee relations implications of doing so are a minefield and that course should not be undertaken without a clear strategy and an understanding of those implications.”