Employers to be given pay-off option

The government is preparing to offer employers the chance to pay-off sacked workers to spare them the ordeal and expense of going through employment tribunals.

The move, which comes as a result of a report by Adrian Beecroft will, it is hoped, offer some dignity to those members of staff who are dispensed with, while also saving firms the time and money involved in defending a dismissal by way of a tribunal. The proposals being prepared by ministers would still give workers the option of refusing a pay-off but it would be more expensive for them to take the case to a tribunal subsequently. Also, those who were to launch unfair dismissal claims would have to go to a dispute-resolution service first.

Ministers hope the move will give a boost to small firms especially, who are often fearful of sacking underperforming staff because they do not have the time or the money to defend such a claim. However, though many in government want to see such moves brought in, the Liberal Democrat side of the coalition is not so keen. They have consistently fought against the Beecroft report, with business secretary Vince Cable having called it “bonkers”.

The government will work, over the summer, on issuing guidance for using settlement agreements and will include draft letters and model templates that employers and employees can both use.

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