Business Secretary Vince Cable has put forward proposals for consultation that would make it easier for employers to fire workers, such a capping how much employees can claim for unfair dismissal at employment tribunals and bringing in settlement agreements, whereby staff and bosses can agree on staff leaving without being able to go to a tribunal but in return for a cash payout.
Mr Cable acknowledged that Britain already has very flexible labour markets. But he is keen to do more to help small companies by reducing the burden of employment tribunals, which is why the Government is reforming, and moving to less confrontational dispute resolutions through settlement agreements.
However, the proposals have met with a barrage of opposition from union leaders, who say that the changes will penalise employees. Some argue that if people have been unfairly dismissed, it means that the employer has done something wrong, so it should be up to a tribunal to decide what sort of compensation the person deserves.
While others are pleased that the ‘fire at will’ proposals have been watered down, but feel that the remaining proposals represent an unacceptable attack on the employment rights of employees.
In his defence, Mr Cable said that he was “trying to strike a balance” between helping employers and protecting employees. He said that the Government doesn’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.
And on the whole, small business leaders welcomed the altered proposals, as many small firms don’t take on staff because they fear being taken to an employment tribunal or having to go through an expensive and lengthy dismissal process.