As the rumours over various changes to employment law continue to spread, it now comes to light that the recent news that unfair dismissal could be axed may only relate to smaller sized employers. Throughout all these proposed changes there has been a consistent thread of wanting to make it easier for businesses to employ workers. It has also always been recognised that it often the smaller to medium sized businesses without dedicated HR departments that might need this help more than others.

The suggestion that the removal of unfair dismissal might only apply to smaller businesses has infuriated unions who maintain that it would create a two tier work-force. It's not just the relaxed rules on unfair dismissal that this might apply to. Jeremy Heywood, Number 10 permanent secretary, has commented that this and other relaxed rules would only really benefit the smaller, 'micro' businesses. The secretary has been keen to make a compromise on the much more right wing approach of Adrian Beecroft.

Advocates of the proposed reforms believe that they are a necessary part of improving the growth of our economy. If employers know that they can get rid of workers they believe not be working hard enough without the need to go through prolonged and sometimes complicated procedures they might be more likely to employ people. UK unemployment is at its highest for 17 years, with particularly high rates of youth unemployment. The Office for National Statistics recently announced that 2.57 million people were out of work over the June to August period, the highest since the autumn of 1994. It is clear that something must be done and this is why the coalition government continues to explore ways in which to bring about a system of 'No Fault Compensatory Dismissal' as suggested by the leaked  Beecroft report. Whilst the business secretary Vince Cable strongly opposes the suggestions, he is aware that some sort of compromise will need to be reached for the good of the economy.

The suggestion of application of these more relaxed laws only to smaller businesses could prove difficult to implement. It would involve, for example, deciding what makes a small or 'micro' business for the purpose of these relaxed laws.

There has also been the suggestion that small businesses may be exempt from carrying out immigration checks when they employ new staff. This might anger  some unemployed British citizens who in the past have exhibited an uneasiness about the lack of jobs in some areas and industries. In the past British workers have felt that they have been unable to compete with the lower rates some immigrants would accept for their work.

Another possible side affect to these proposed changes is an increase in union membership as workers are likely to look to unions for the protection they once received from the law. This might lead to an increase in strikes, which would adversely affect productivity and may not help smaller business after all. Others have argued that the ability to dismiss without reason is merely a cover up for the real issue. The real issue being the lack of managerial and leadership skills at many UK businesses. If this is true then it could have a detrimental affect on the economy.

There is a lot to consider when proposing methods as to how to improve the employment sphere so as to encourage employment, and in turn economic growth. One thing is for sure, however, time is running out if the government want to introduce measures in time for the new growth review and this has only served to add pressure to any announcements for reform.