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A controversial proposal to make it easier for businesses to sack staff through ‘compensated no-fault dismissals’ appears to have been dropped by ministers after it failed to win support.The proposal, a key recommendation in the government-commissioned report written by the venture capitalist Adrian Beecroft, has been omitted from the Enterprise and Regulatory Reform Bill which is currently being debated in the House of Commons. A clause outlining new voluntary settlement agreements has today been inserted in its place, a move which is being widely interpreted as evidence that the no-fault dismissal idea has been killed off.Although there has been no official confirmation that the proposal is dead, government sources revealed to newspapers that only a minority of businesses had supported it in a recent consultation. Of 135 employers who responded to the consultation, which closed on June 8th, only 38 per cent were reportedly in favour, with the rest opposed or unsure. Furthermore, only two of eight leading business groups backed the plans. The CIPD was among those opposed to the proposal. Earlier this month, CIPD employee relations adviser Mike Emmott called the no-fault dismissal plan "objectionable and unnecessary" and warned that it would have created "a license for bad practice in managing people." Responding to the latest development, Steve Radley, Director of Policy at EEF, the manufacturers’ organisation, said: “Government is right to reject proposals for no-fault dismissal as a red herring. The case for it is far from proven, with limited benefits and no evidence that it would increase recruitment. “Right now there are more pressing employment issues that really matter to business. The Enterprise and Regulatory Reform Bill needs to deliver the flexibility that will support the growth and jobs our economy desperately needs."Opposition from the Liberal Democrats within the coalition is likely to have played a significant part in Beecroft's recommendations being shelved. Business Secretary Vince Cable has previously complained that the reform would leave workers with the "dead hand of fear" hanging over them, and is said privately to have described the Beecroft report as "bonkers".