Contrary to what you might have read in the papers (naming no broadsheet names), “compensated no-fault dismissals” have no date for implementation. However, The Department for Business Innovation and Skills has put out a “call for evidence” on that proposal, and, more generally, for views on how the current ACAS Code of Practice operates in practice – and whether it is too onerous. If you go to the trouble of wading through the whole document you will discover that it constantly refers to “perception” and “fear” of employment law regulation, and that in international league tables of such things, the UK shares second place with Canada after the US as the easiest place in the developed world to dismiss employees. You will also discover that health and safety is a bigger issue for most employers than unfair dismissal law.
Leaving aside the question of whether the reforms contemplated are based on rational considerations or not, it is interesting to see that a possible model for a dismissal regime for “micro” businesses is the Australian Small Business Code. This certainly has the merit of brevity, being a mere five pages, including a checklist for employers to complete.
But how would such a code stand alone, without any reference being made to the law of unfair dismissal, and whatever more extensive guidance is provided for other employers? For example, the Australian Code states that the reason for dismissal must be a “valid reason based on the employee’s conduct or capacity”. That would allow no scope for dismissals for redundancy or as part of a business reorganisation. How would that gap be plugged? Another example is that under the Australian Code, dismissal is fair in cases of serious misconduct “when the employer believes on reasonable grounds” that the conduct is serious enough to merit dismissal. What would those reasonable grounds be? Might that be a genuine belief in the employee's guilt which it is reasonable for the employer to hold? Does that sound familiar at all?
Of course, the Australian Code isn’t going to be adopted wholesale (surely), but those examples give a flavour of how extreme brevity may leave a code open to interpretation along much the same lines as our existing body of experience in unfair dismissal. That’s not to say that there aren’t some areas where it can be difficult for smaller enterprises to know how best to comply with the current ACAS code. Two linked examples spring to mind. If you have a single owner/manager of a business, it’s most impractical to attempt to have different individuals investigating a disciplinary issue and making the disciplinary decision, let alone finding a third individual to consider any appeal. While as currently formulated, the law does permit consideration of the employer’s size and administrative resources to an extent, this could perhaps do with emphasising more in practice.