The review is in response to concerns among ministers that current dismissal procedures are too onerous and complex.
The government has published a call for evidence from employers, employees and ay other interested parties.
Views are also requested on the idea of compensated no-fault dismissal for ‘micro-businesses’ ' those with fewer than 10 employees. Under such a system, a business would be able to dismiss a worker from a micro-business, where no fault had been identified on the part of the employee, with the payment of a set amount of compensation.
Business secretary Vince Cable said: “The UK already has one of the world’s most flexible, adaptable labour markets, making it one of our strengths and it stands up very well in international comparisons. However, we recognise that there is room for improvement which balances the needs of business while ensuring that the necessary employment protections are upheld.
“We are already implementing a radical package of reforms to the employment tribunal system and increasing the qualifying period for unfair dismissal from one to two years. These are all measures that will help improve the way businesses hire, manage and end a working relationship.
“But we also recognise that 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.”
For the trade union movement, TUC general secretary Brendan Barber responded: “Scrapping protection against unfair dismissal, even for people who have given years of loyal service, will do absolutely nothing to boost the economy. If people are constantly in fear of losing their jobs it will lead to even less consumer spending.
“Losing your job is one of the worst things that can happen to anyone, especially when unemployment is so high. Employees should only be dismissed for fair reasons, as set out in current laws. The clue is in the name - unfair dismissal.
“Employers already have powers to make fair dismissals for misconduct or poor performance. Giving bosses the right to act unfairly may go down well on the backbenches, but it will horrify employees.
“But while this proposal does nothing for growth, it does show the kind of economy those close to the Prime Minister want to create - one in which nasty bosses are given full license to undermine those trying to maintain decent standards.”
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