Cable forces U-turn on 'fire at will' job reform


Moves to give companies sweeping powers to dismiss under-performing employees are set to be abandoned by David Cameron following a bitter Coalition split over the issue.

The Prime Minister risks a new row with the Conservative right by accepting that plans to allow employers to "fire at will" cannot be forced through in the face of Liberal Democrat resistance.

Conservative Cabinet ministers are arguing for the Government to take an axe to employment law which they argue is helping to choke off economic growth and job creation. A report commissioned by Downing Street by the venture capitalist – and Tory donor – Adrian Beecroft recommended allowing companies to sack staff whose performance it considered to be poor.

But the proposals have run into entrenched opposition from Vince Cable, the Business Secretary, and fellow Liberal Democrat ministers. He has announced a consultation on whether "no-fault dismissals" could be introduced for small companies – but yesterday signalled he had reached his own conclusion after he described advocates of the move as "ideological zealots". Mr Cable said: "British workers are very cooperative and they're very flexible. So we don't need to scare the wits out of workers, with threats to dismiss them."

The chances of the measure being implemented were fast fading as Downing Street sources said the Prime Minister was not prepared to "die in a ditch" for the proposal. One aide said: "If anyone thinks tinkering with employment laws will make any significant difference to Britain growing again, they are misguided."

However, a Conservative Cabinet minister told The Independent he believed employment laws had become tilted against employees – and he strongly backed the Beecroft proposals to make it easier to dismiss staff. He said: "There is going to be a massive push by us to do something on it." The minister said: "Even if the employers win the case in the end, the costs involved for them are huge. At the moment they are much better off giving a wodge of cash to bad employees to make them leave and the employees know that."

A copy of Mr Beecroft's report – which is still open to consultation until next month – was released last night ahead of a freedom of information request.

Its other proposals include:

* Delaying the introduction of rights for parents to ask for extra leave.

* Cutting from 90 to 30 days the consultation period when a company plans redundancy programmes.

* A cap on loss of earnings compensation for employees who make successful unfair dismissal claims.

Some of Mr Beecroft's proposals have been supported by the Liberal Democrats. But the call for companies to be given widespread powers to dismiss staff has split the Coalition partners.

Employment laws: the impasse

David Cameron

The Prime Minister is instinctively sympathetic to Mr Beecroft's calls to loosen employment regulations (apart from any move to chip away at parental leave). But he knows he cannot push the most controversial measures through.

Vince Cable

The Business Secretary is leading efforts to find ways of stimulating sluggish company growth. He welcomes some moves to cut red tape, but making it easier to sack staff goes against all his Liberal Democrat instincts.

Adrian Beecroft

The multi-millionaire businessman was brought in to think the unthinkable on employment law. His conclusion is that protections against redundancy have to be eased and plans for flexible working delayed.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA celebration of British elections
  • Get to the point
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing or Business Graduate Opportunity - Norwich - £22,000

£18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + Commission: SThree: Are you great at building rela...

Ashdown Group: Database Analyst - Birmingham - £22,000 plus benefits

£20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...

SThree: Recruitment Resourcer

£20000 - £25000 per annum + Uncapped Commission: SThree: Do you want to get in...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before