Last week, the government announced a consultation into changes to workplace dismissal laws, including the introduction of compensated 'no-fault dismissal', which would allow companies with fewer than 10 employees to dismiss staff using a scaled level of compensation, without risking a tribunal.

According to business secretary Vince Cable, the move would cut red-tape for small businesses wanting to release a member of staff who wasn't working out, reducing a currently costly process.

Wallace Print Group manager Gary Wallace said that under current law, an employer is "guilty until proven innocent" when involved in dismissal cases.

He added: "About bloody time, as anything the government can do to help out SMEs is a good move by me.

"That said, I would like to see the company size increased to give a fairer representation of SMEs. Businesses with fewer than 10 staff is a start but I think raising that to companies fewer than 25 staff would be a more realistic target."

Orbis Print director John Lloyd-Hughes, whose company employs fewer than 10 employee, agreed that cutting legislation and cost was laudable.

"It would, of course, have to be an agreeable scale of payment for both parties," he added. "But I am sure that both employers and employees would rather see the money spent on the compromise itself rather than contributing to the expensive procedure of litigation."

Aura Print Marketing manager Scott Clarkson said that the move was a "step in the right direction" in helping small businesses avoid unnecessary costs.

However, he warned: "The system would need monitoring to ensure the employee's rights to a verbal, written and final warning are not affected. If the company talks to the employee about an issue and there is no improvement in the employee's behaviour then the company is within its rights to dismiss that employee without fear of legal reprisal.

"The system should not be abused by employers looking for an easy way out during financial difficulties. If this is the case, then the employee needs to have their rights protected."

Ink Shop managing director Stuart Mason agreed that an overly lax system could be easily manipulated by unscrupulous employers, although he added that the current system is too biased towards employees.

He said: "I would like to see a more balanced and measured approach to dismissal for staff that under perform, without the current burdens this has currently.

"We absolutely must ensure that relaxed employment law is to protect the employer against under performing employees and not a route for easy and cheap 'redundancies'."

Unite assistant general secretary Tony Burke said: "The 'no-fault dismissal'' proposal will lead inexorably to a US-like situation where bosses can fire workers for good reason, bad reason or no reason at all."