Beecroft’s compensated no-fault dismissals shunned


After deliberation in the House of Commons over the Enterprise and Regulatory Reform Bill, it would appear that one of the key recommendations held in Adrian Beecroft’s report on employment law regarding the introduction of ‘Compensated No-Fault Dismissals’ has been shunned and therefore reportedly omitted from the Bill.


Part of Beecroft’s report addressed the concern of unfair dismissal, namely the employers’ ability (or lack of) to dismiss underperforming employees.  With particular reference regarding concerns on costs incurred by small businesses, Beecroft suggested four approaches to make it simpler for employers to dismiss employees for underperformance related issues without worrying about the potential rebuttal.


The introduction of Compensated No-Fault Dismissals would effectively allow an employer to dismiss anyone without giving a reason provided they make an enhanced leaving payment calculated in the same way as a redundancy payment; ‘New legislation would prescribe that it is not unfair dismissal if the employer simply states he is not happy with the employee’s performance and then consults, gives notice and pays a defined level of compensation linked to the employee’s salary and length of employment.’


Although it is not certain that this part of the bill has been discarded, it has instead been replaced with a clause on Voluntary Settlement Agreements.  Further still, of 135 employers who responded to the recent consultation only 38 per cent were reportedly in favour of the proposal and only two of eight leading business groups backed the plans.