Business secretary Vince Cable MP was responding to recommendations of the Beecroft report, published in May, chief of which was a proposal to allow employers to implement no-fault dismissal – or 'fire at will'.
One of the proposals that has been confirmed is that compensation for unfair dismissal will be reduced.
Head of employment and HR at Turbervilles Solicitors, Marc Jones, questions whether these reforms have actually changed anything: "The proposal failed to consider the negative impact on businesses in that employees were more likely to job-hop to a company that provided job security and the right not be unfairly dismissed after two years of employment."
Jones commented: "We do not know at what level this will be capped at. Will it be pre-1998 figure of £12,000 or the post-1998 figure of £50,000? Neither, in my view, had an impact on the number of claims being presented to a tribunal."
Employment partner at Gateley, Michael Ball thinks the cap on dismissal payments is unnecessary: "Politicians are tinkering with something they simply don't understand. It's difficult to see how it will deliver a realistic benefit to employers and it has limited impact on most employees.
Founder and principal of City law firm, Fox, Ronnie Fox, thinks it comes as no surprise the no-fault dismissal proposal has been dropped. He said: "The Government is trying to strike a balance between simplifying the process and reducing the cost of dismissing employees, and minimising the risk of a row within the Coalition and an emotional backlash from trade unions."
Vince Cable, Liberal Democrat business secretary, has admitted that the Government was trying to have "the best of both worlds". He went on to say: "We've been very, very careful and moderate in the way we have approached this.
"We want to have confidence in business that they can hire people, but we want people to go to work knowing that at the end of the day, if they have a very bad relationship, they do have some basic labour rights and protection," he added.
