Amid the economic gloom, the government is proposing to relax employment laws to help beleaguered businesses.

So what's new?

Under the proposals:

• micro employers with fewer than 10 employees could be exempt from unfair dismissal claims, enabling them to sack workers by paying a sum of money (known as "compensated no-fault dismissals");
• the length of service requirement to bring an unfair dismissal claim will rise from one year to two;
• employers and their staff could have ‘protected conversations' to allow discussions on poor performance or retirement without comeback;
• the burden of collective consultation on companies making large numbers of staff redundant may be reduced;
• the Employment Tribunal process would be changed to discourage a claims culture, including greater involvement by ACAS, increased costs awards, and fees to bring a claim and to proceed to a hearing; and
• the use of compromise agreements to end employment would be simplified.

In a separate report, change is also afoot over managing sickness absence. There has been growing concern over the number of people on long-term sick leave and GPs who are seen as too quick to sign people off. The introduction of the "Fit Note" was supposed to address this but has not had a large enough impact. The headline recommendations for change are:

• no more recovery of statutory sick pay costs;
• easier dismissals of those on long-term sick leave, including a one off payment without the risk of a Tribunal claim;
• an independent panel should certify employees as long-term sick, not family GPs;
• those on sick leave may be offered alternative roles, with more emphasis on what the employee can still do, rather than being off work completely; and
• tax relief breaks for employers who spend on rehabilitation programmes for long-term sick.

A good thing for employers, surely?

The aim of these proposals is to promote recruitment without fear of ending up in costly Tribunal claims. But however laudable the aim, the consequence may be more complex. Stopping employers from claiming back statutory sick pay costs would hit small businesses hard, even if they do stand to benefit under other reforms. Micro employers may be delighted to be exempt from unfair dismissal claims, but will they find it harder to recruit due to an increased sense of job insecurity?  Or will they find that they are facing instead more complex discrimination claims?

There is also simply the burden of change. Employers of every size report that they struggle to keep abreast of complex employment laws, involving both the time and expense of training and changes to company policies.

What happens now?

Many of the proposals will shortly be entering a period of consultation or review. Those that survive intact are unlikely to be implemented until at least late 2012, probably later. One notable exception to this is the increase in qualifying service to bring an unfair dismissal claim, which is due to increase in April 2012.

But there is also a political dimension here. These proposals are seen as placating the employer lobby at the expense of individual employees. The Liberal Democrats have vetoed another proposal which would have allowed businesses of any size to sack poor performers without explanation. They are reportedly less than keen on some of the remaining proposals. Unions too, will be voicing their concerns. We expect a bumpy ride.

Employers should keep listening for further developments. Those wishing to contribute to the debate will be able to do so in the New Year.

Go to www.bis.gov.uk [1] for further details.

Hannah Saunders, Keystone Law