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Vince Cable plans 'settlement agreements' for firms to axe staff | Vince Cable plans 'settlement agreements' for firms to axe staff |
(about 6 hours later) | |
Business Secretary Vince Cable is to announce plans to make it easier for firms to remove under-performing workers in return for a pay-off. | Business Secretary Vince Cable is to announce plans to make it easier for firms to remove under-performing workers in return for a pay-off. |
Using "settlement agreements" would allow more staff to agree to go without the need to go to employment tribunals. | Using "settlement agreements" would allow more staff to agree to go without the need to go to employment tribunals. |
The move comes amid disagreement between Conservatives and Liberal Democrats over proposals to make it easier to sack poor-quality employees. | The move comes amid disagreement between Conservatives and Liberal Democrats over proposals to make it easier to sack poor-quality employees. |
But a government source said the two ideas were "separate". | But a government source said the two ideas were "separate". |
The UK has re-entered recession and the coalition says its priority is a return to growth, with current employment law cited as one of the restrictions on this. | The UK has re-entered recession and the coalition says its priority is a return to growth, with current employment law cited as one of the restrictions on this. |
Mr Cable will announce in Parliament that he intends to add a clause to the Enterprise and Regulatory Reform Bill, to make it quicker and easier to use settlement agreements, allowing staff to leave the company in return for a payment. | Mr Cable will announce in Parliament that he intends to add a clause to the Enterprise and Regulatory Reform Bill, to make it quicker and easier to use settlement agreements, allowing staff to leave the company in return for a payment. |
This would act as an alternative to going to an employment tribunal, which can be costly and time-consuming, and, according to businesses, make bosses less inclined to hire new people. | This would act as an alternative to going to an employment tribunal, which can be costly and time-consuming, and, according to businesses, make bosses less inclined to hire new people. |
'Pro-business' | 'Pro-business' |
The agreements are currently available for employers in some circumstances, but ministers want to make it easier to use them, rather than go to a legal dispute. | The agreements are currently available for employers in some circumstances, but ministers want to make it easier to use them, rather than go to a legal dispute. |
Businesses would be legally protected from any offer they make being used as evidence in an unfair dismissal tribunal case. | Businesses would be legally protected from any offer they make being used as evidence in an unfair dismissal tribunal case. |
Mr Cable said: "Settlement agreements are smart, fair and pro-business reforms which deliver results for employees and employers." | Mr Cable said: "Settlement agreements are smart, fair and pro-business reforms which deliver results for employees and employers." |
He added that the change "empowers employers by enabling them to keep their workforce flexible and encouraging alternative ways of solving workplace problems rather than resorting to a tribunal. But crucially it does so in a way that keeps the necessary protections for employees in place". | He added that the change "empowers employers by enabling them to keep their workforce flexible and encouraging alternative ways of solving workplace problems rather than resorting to a tribunal. But crucially it does so in a way that keeps the necessary protections for employees in place". |
Earlier this year Adrian Beecroft, a Conservative-supporting venture capitalist, was commissioned by Prime Minister David Cameron to look into reforming employment law. | Earlier this year Adrian Beecroft, a Conservative-supporting venture capitalist, was commissioned by Prime Minister David Cameron to look into reforming employment law. |
His report, published last month, recommended that bosses should be able to fire staff, without giving a reason, while giving them a pay-off linked to salary and service. | His report, published last month, recommended that bosses should be able to fire staff, without giving a reason, while giving them a pay-off linked to salary and service. |
Small firms, without specialist human resources departments, should be exempt from some regulations, he added. | Small firms, without specialist human resources departments, should be exempt from some regulations, he added. |
Labour condemned the plan, saying it would undermine people's rights and not guarantee more growth. | Labour condemned the plan, saying it would undermine people's rights and not guarantee more growth. |
And Mr Cable, a Liberal Democrat, said the recommendation that "no-fault dismissals" be allowed was "nonsense", arguing that it was not the job of government to "scare the wits out of people" by reducing their employment rights. | And Mr Cable, a Liberal Democrat, said the recommendation that "no-fault dismissals" be allowed was "nonsense", arguing that it was not the job of government to "scare the wits out of people" by reducing their employment rights. |
Mr Beecroft responded by calling the business secretary a "socialist" who appeared "to do very little to support business". | Mr Beecroft responded by calling the business secretary a "socialist" who appeared "to do very little to support business". |
A government source told the BBC the no-faults dismissal idea, which ministers are looking into, was "separate" from the plans to be announced by Mr Cable. | |
Settlement agreements would provide a way to "give businesses more confidence", they added. | Settlement agreements would provide a way to "give businesses more confidence", they added. |
For Labour, shadow business secretary Chuka Umunna said: "To say that the Beecroft Report commands the support of the entire business community is entirely wrong." | For Labour, shadow business secretary Chuka Umunna said: "To say that the Beecroft Report commands the support of the entire business community is entirely wrong." |
He told BBC One's Sunday Politics that it would be wrong to allow bosses to "fire at will". | He told BBC One's Sunday Politics that it would be wrong to allow bosses to "fire at will". |
Changes to employment law, it has been argued, would improve the supply of suitable staff to firms, who would be less afraid of having to make large pay-outs or face legal action when laying off those who were no longer needed. | Changes to employment law, it has been argued, would improve the supply of suitable staff to firms, who would be less afraid of having to make large pay-outs or face legal action when laying off those who were no longer needed. |