Vince cable, the Business Secretary has announced a consultation on employment legislation designed to make the hiring and firing of staff easier for firms.
One proposal is to find out views as to whether companies with 10 or less staff should be able to fire staff without the possibility of being taken to an employment tribunal if they pay compensation. This means that staff in small businesses could lose the right to claim for unfair dismissal.
Mr Cable said that he wanted to make the process of recruitment easier for staff without making existing staff fearful of their job security.
The unions and Labour have criticized the proposals. Labour said the government should focus on making it easier for firms to recruit staff rather than sack them.
In his speech Mr Cable outlined plans to reduce the process of dismissal of workers but insisted this would not erode workers rights.
Mr Cable said: “The agreement is we need to protect employee rights, maintain job security - that is very important for the economy - but also we need growth.
“We have to balance that [employee rights] against the need to create an environment in which firms will expand and take on new employees".
The new rules will allow employers to have “protected conversations” that allow them to talk to staff about issues such as poor performance and early retirement without the threat of these conversations being used against the employer at job tribunal claims.
Mr Cable set out proposals to cut the length of consultation periods for redundancies. The current consultation period is 90 days but the government plans to cut this to just 30 days. A “rapid resolution scheme” to allow simple cases to be settled quickly is also expected to be announced. Employees would have to have been with a company for two years before they could make a claim for unfair dismissal. The current limit is one year of employment.
Paul Kenny, general secretary of the GMB union, said: "These changes will make it harder for hundreds of thousands of workers to bring cases of victimisation, unfairness and bullying at work.”
Business groups welcomed the proposals. British Retail Consortium Director General, Stephen Robertson, said: "Retailers are particularly dependent on their staff for the success of their businesses. Good working relationships are highly valued and they only break down in a tiny minority of cases.”
Katja Hall, CBI Chief Policy Director, said: "The Government has listened to our concerns about how employment law is acting as a barrier to creating growth and jobs.
"We particularly welcome the changes to tribunals, including a rapid resolution scheme, which will allow faster justice for legitimate disputes. With unemployment rising, we need to get on with these changes to give employers the confidence to hire."
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