Labour and the trade unions have condemned the Government for halving the notice period employers have to give before making large-scale job cuts to 45 days.
But business leaders welcomed the decision by Vince Cable, the Liberal Democrat Business Secretary, to speed up the redundancy process. The idea was recommended by Adrian Beecroft, a venture capitalist and Conservative Party donor, in a review of employment laws for Downing Street. His most controversial proposal - to allow companies to fire workers “at will” without them being able to claim unfair dismissal - was blocked by Mr Cable, to the anger of many Conservatives, who dubbed him “The Anti-Business Secretary.”
But Mr Cable showed he was open to pro-business reforms by backing plans to reduce the mandatory 90-day consultation period when a firm is considering 100 or more redundancies. Mr Beecroft proposed a 30-day period but Mr Cable today announced that a 45-day one will take effect next April.
Jo Swinson, the Lib Dem Employment Relations Minister, insisted the move would help workers and businesses. said a consultation exercise had produced strong support for the change. She added: “The process is usually completed well within the existing 90-day minimum period, which can cause unnecessary delays for restructuring, and make it difficult for those affected to get new jobs quickly.”
But Ian Murray, the shadow Employment Minister, said: ”David Cameron should be making it easier to hire, not easier to fire. We need a real plan for jobs and growth, not an attack on people's rights at work.“
Brendan Barber, the TUC General Secretary, said: ”The last thing we need is for the government to make it easier to sack people. These measures will not create a single extra job. The idea that an employer will change their mind about taking someone on because the statutory redundancy consultation period has been reduced from 90 to 45 days is close to absurd.“
Len McCluskey, leader of the Unite union, said: ”This is one of the most regressive anti-job measures ever taken by any government. To be taken in the depths of this financial crisis, when the economy faces a triple-dip recession, is utter madness.“
However, employers groups praised the move. Neil Carberry, the CBI's director for employment and skills, said: ”The CBI has long called for a simplification and streamlining of the collective redundancy rules and today's announcement is a welcome move in that direction.“
Dr Adam Marshall, director of policy at the British Chambers of Commerce, said the change would produce “timely but fair” decisions. ”In the 21st century, requiring a business to spend a quarter of a year consulting on how to restructure is unnecessary, frustrating and potentially disastrous,” he said. “This greater flexibility to change direction more swiftly reduces uncertainty for employees and customers and may help to prevent further job losses where the survival of the business could be at risk.”