A day before the government-imposed deadline for responses in relation to Beecroft’s proposal on no-fault dismissals, the CIPD says that the changes could be damaging for employee relations.

The report outlined proposals which would allow businesses to fire under-performing staff. Business minister Mark Prisk announced in May that 17 of the 23 recommendations would be put into practice immediately, with the remaining six subject to the consultation period ending 8 June.

As well as highlight the impact it could have on employee relations, the CIPD believes that the new regulation could fail to achieve the intended result.

Mike Emmott, employee relations advisor at CIPD, comments, ‘Adrian Beecroft’s proposal for a system of compensated no-fault dismissal is objectionable and unnecessary.

‘It is objectionable because it would be a licence for bad practice in managing people and damage the reputation of the whole micro-business sector. It is unnecessary because employers facing a possible tribunal claim can already offer the employee a compromise agreement, and tailor the level of compensation to the particular circumstances.’

Venture capitalist Beecroft has been quoted in The Daily Telegraph as saying that entrepreneurs are going abroad and that unemployment is rising because of the coalition government’s failure to help business.

In response to Beecroft’s no-fault dismissal suggestion, business secretary Vince Cable has previously outlined his feelings on the change.

Speaking in May when he announced the call for evidence to gain opinion from businesses in the UK, he added, ‘In my daily conversations with businesses, [no-fault dismissal] has rarely been raised with me as a barrier to growth.

‘Businesses are much more concerned about access to finance or weak demand than they are about this issue.’

Emmott agrees with Cable and says, ‘According to the government’s own research, unfair dismissal doesn’t even figure in the list of top ten regulations discouraging them from recruiting staff.’