Employment law reforms are attack on workers, unions claim

 

Employment law reforms announced today by Vince Cable will allow company bosses to “exploit and bully” workers, unions claimed.

The Business Secretary confirmed that controversial “fire at will” proposals have been abandoned but firms are to be given stronger legal protections to pay off under-performing staff.

Workers also face a drastic cut in how much compensation they can win in unfair dismissal cases as part of the shake-up aimed at getting businesses hiring again.

Chris Keates, general secretary of the NASUWT, said: “Whilst the 'fire at will' proposal has been watered down, the remaining proposals represent an unprecedented and unacceptable attack on the employment rights of teachers and other ordinary working people.

”The Liberal Democrats should be ashamed to be associated with the introduction of measures which give employers licence to exploit, bully and discriminate against their workforce.

“However the Coalition seeks to spin this announcement, this emphasises the contempt for working people which pervades the Coalition's policies.”

Mr Cable confirmed that “no-fault dismissal” proposals made in the David Cameron-commissioned Beecroft Report are being dropped after a lack of support for the idea among the business community.

The Liberal Democrat has made no secret of his opposition to the recommendation, which many Tories backed, but aides were keen to stress the controversial proposal was being ditched because there was “no significant evidence” that it would help employers and insisted Conservative as well as Lib Dem ministers were behind the move.

The Business Secretary wants to bolster settlement agreements - where employers can offer under-performing employees a pay off - so they become more widely used to resolve disputes.

Under the proposals if the worker accepts the deal it will become legally protected so it cannot be used later as evidence in any court case or tribunal.

Officials insist the move is fair to employees as they are not obliged to take the offer and also incentivises bosses to come up with a good package, which can include a binding promise of a favourable reference.

Mr Cable will also consult on plans to change the limit on unfair dismissal payouts to a maximum of 12 months' salary or set it at an even lower figure.

He wants to reduce the current £72,300 cap significantly in the hope of encouraging small businesses to start hiring more staff.

The Lib Dem believes the current cap deters firms, particularly small businesses, from hiring because they fear they could be landed with a big bill.

Department for Business, Innovation and Skills' figures show most cases are settled at around £5,000-£6,000 while just 6 per cent receive more than £30,000 and 1-2 per cent receive the maximum payout.

Also among the reforms are plans to giving judges powers to sift through tribunal cases before they reach court to allow them to dismiss weak cases without the need for a hearing.

Paul Kenny, GMB general secretary, said: “The steps being taken here by government, and the 'noises off' about it being easier to sack people, will have a much more profound effect on workers than employers. It will increase feelings of job insecurity and reduce the confidence of workers as consumers to commit to spending.

”Therefore it will have a dampening effect on consumer demand which will in turn further weaken the confidence of businesses who consequently will not take on workers.“

TUC general secretary Brendan Barber said: ”We are very pleased that Adrian Beecroft's proposal to allow employers to fire employees at whim has been ignored. This would have set workers' rights back decades and created huge insecurity in workplaces throughout the country.

“However, reducing payouts for unfair dismissals will let bad employers off lightly and deter victims from pursuing genuine cases. This will feel like another slap in the face following the Government's decision to bring in fees for employment tribunals.

”For all the Government's talk that helping businesses to sack poor performing workers will make them more productive this is little more than a smokescreen to erode hard-won rights. Making it easier for bad employers to get away with misconduct is not the way to kick-start our economy and will not create a single job.“

Mr Cable said he was ”trying to strike a balance“ between helping employers and protecting employees.

”People would feel intimidated if they knew that they could be fired on the spot without good reason and that is why we have said no to those proposals,“ he told ITV1's Daybreak.

”We don't want people to feel insecure, but at the same time small companies have got to feel confident that if they take somebody on they're not going to get caught up in a very elaborate, legalistic, time-consuming tribunal system.“

Shadow business secretary Chuka Umunna said: ”Ministers should be making it easier to hire, not easier to fire people. We are in a double dip recession due to this Government's failed economic policies, not because of the protections people have at work. Instead of adopting a credible plan for growth, this Government is attacking the rights of every employee in this country.

“Sacrificing people's rights at work is not the way to bolster consumer confidence and get our economy moving again.”

John Walker, national chairman of the Federation of Small Businesses said: “We welcome today's announcement because almost half (42 per cent) of our members say employment law is the most difficult area of compliance.

”It shows a balanced package of measures which will help to reduce the fear of taking on staff for small firms.

“It is good news that instant dismissal plans have been shelved. We were against this idea, believing it could create a two-tier labour market and be bad news for worker relations.

”Too many small firms don't take on staff because they fear being taken to an employment tribunal. Other firms fear facing an expensive and lengthy dismissal process. These measures will go some way to addressing the issues, improving the situation for both employers and employees alike.“

Adam Marshall, director of policy at the British Chambers of Commerce, said: ”Employers will be encouraged that the Government is taking steps to reduce the burden of the employment system and create a more flexible labour market.

“Dismissal is always a last resort, but is at times necessary to protect a business and other members of staff. The fear of malicious tribunal claims and an unnecessarily antagonistic dismissal process has a chilling effect on employment.

”We would urge the Government to move swiftly from consultation to implementation on settlement agreements and lower tribunal awards, as these proposals will boost confidence whenbusinesses on the ground can see them in action.“

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

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

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

iJobs Job Widget
iJobs General

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Recruitment Genius: General Factory Operatives

£18000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links