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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".
The proposal is still up for consultation and a government source told the BBC it was "separate" from the plans to be announced by Mr Cable. 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.