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Views are also requested on the idea of compensated no-fault dismissal for micro-businesses 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.”

Through the Call for Evidence, the Government is seeking to establish a strong evidence base on the current understanding of the dismissal process, including awareness, understanding and use of the Acas Code of Practice on Discipline and Grievance. The Government will be seeking the views of employees, business organisations and all other interested parties.

The Government have also published the Employment Law Review annual update in the Houses of Parliament, outlining how the review has been taken forward. The report summarises the current programme and looks ahead to further areas we are considering as part of the Review.

In addition, it was also announced that the Employer’s Charter, first published in January 2011, has been updated to include pointers on sickness absence and recruitment. The Charter aims to counter the misconception that employment protections are all one-way - towards the employee. It will give greater clarity to managers on what they can already do to deal with issues in the workplaces, on subjects such as performance, sick leave, maternity leave, requests for flexible working and redundancy.

Notes to editors:

1. The Call for Evidence on ‘Compensated No Fault Dismissal’ and the Acas Code of Practice on Discipline and Grievance can be found here http://www.bis.gov.uk/assets/biscore/employment -matters/docs/d/12-626-dismissal-for-micro-businesses-call. It will close on 8 June 2012.

2. The Employment Law Review is a Parliament long review looking at all aspects of employment law and is part of the Government's plans to deliver growth by breaking down barriers, boosting opportunities and creating the right conditions for businesses to start up and thrive. Achievements so far can be found here http://www.bis.gov.uk/policies/employment-matters/employment -law-review/achievements-to-date

3. The Employment Law Review annual update and the Employer’s Charter can be found here http://www.bis.gov.uk/policies/employment-matters/employment- law-review/latest-developments

4. A recently published labour market discussion paper entitled, ‘Flexible, effective, fair: Promoting economic growth through a strong and efficient labour market,’ can be found at http://www.bis.gov.uk/assets/biscore/employm ent-matters/docs/F/11-1308-flexible-effective-fair-labour-market

5. BIS's online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.