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Leaked report calls for unfair dismissal rules to be scrapped

The unfair dismissal rules should be scrapped to make it easier for employers to sack unproductive workers, a leaked Government report suggests.

A document obtained by The Daily Telegraph argues that the current unfair dismissal rules make it difficult for bosses to fire underperforming members of staff, enabling some to simply ‘coast along’.

Currently workers who feel they were unfairly dismissed can make a claim after 12 months in a job.

However the leaked report, which was written by venture capitalist Adrian Beecroft, calls for the unfair dismissal rules to be abolished completely.

The document, dated 12 October, says the first major issue for British enterprise is ‘the terrible impact of the current unfair dismissal rules on the efficiency and hence competitiveness of our businesses, and on the effectiveness and cost of our public services’.

It continues: ‘The rules both make it difficult to prove that someone deserves to be dismissed, and demand a process for doing so which is so lengthy and complex that it is hard to implement. This makes it too easy for employees to claim they have been unfairly treated and to gain significant compensation.’

Earlier this month the Government announced changes to the rules on unfair dismissal, which it claims could save British businesses nearly £6 million a year.

Under the changes, which come into force on 1 April 2012, employees will only qualify for the right to claim unfair dismissal after two years of employment, rather than one.

In addition, a fee system will be introduced for those employees who wish to raise a tribunal claim, with a view to reducing the number of 'vexatious' claims. With effect from April 2013, employees must pay a £250 application fee, with a further charge of £1,000 if a hearing is granted. If successful, the money will be refunded to the claimant.