Business Secretary Drops 'Fire At Will' Plans
'No-fault sacking' reforms have been scrapped but bosses will get new powers to fire under-performing workers, Vince Cable has announced.
The Business Secretary unveiled plans that will signal a drastic cut in how much compensation employees can win in unfair dismissal cases.
But company bosses will be given stronger legal protections to get rid of staff not deemed to be meeting required standards under a shake-up of employment laws.
Proposals to introduce "fire at will" reforms - outlined in the David Cameron-commissioned Beecroft Report - are being abandoned after a lack of support for the idea among the business community.
Mr Cable has consistently opposed the plan, which was popular among Tories.
But aides said there was now consensus within the coalition on the move to drop the controversial proposal and stressed it was being ditched because there was "no significant evidence" it would help employers.
Mr Cable said he was "trying to strike a balance" between helping employers and protecting employees.
But unions attacked the shake-up, claiming the employment law reforms would allow company bosses to "exploit and bully" workers.
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."
Brendan Barber, general secretary of the TUC welcomed the move to scrap the proposal "to allow employers to fire employees at whim", but said reducing payouts for unfair dismissals would deter victims from pursuing genuine cases.
Mr Cable told Sky News: "We are trying to strike a balance here ... without creating large-scale insecurity in the labour force and undermining basic employer rights ... and I think we have got the balance right.
"We do respect and want to reserve basic worker rights. We very firmly rejected some proposals which came forward for a kind of 'hire and fire' culture.
"At the same time we want to make it easier for small and medium-sized companies to hire staff without the worry of getting into very legalistic, costly and time-consuming tribunal systems.
"Where we do have disputes and dismissal procedures, to try and deal with it outside of courts and try to deal with it through conciliation wherever possible, through settlement agreements on a voluntary basis, and generally make it easier to hire people - which is what we want to do when there is a lot of unemployment."
Mr Cable 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 package and also incentivises bosses to offer a good package.
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.
Chuka Umunna, the shadow business secretary, told Sky News: "What we actually want to see the Government doing is making it far easier to hire people than to fire people ... by giving small and medium-size businesses a national insurance (NI) break when they take on extra workers.
"But tampering with people's fundamental, basic human rights to be treated in a fair and decent manner by the people that they work very hard for is not the way to go to get this economy out of the recession the Government has triggered with its failing economic policies."
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what do you think?
silly little nobody. mr cable please go away along with the rest of your incompetant cronies and do the country a favour. trying to make yourself important wasting time on things not a lot of people care about. pathetic really.you really do come across as a total nobody.
Not many principles left to sell now Vinny lad. Then the Tories'll fire you out the door. That's ironic!
...MAKE EVERYBODY SELF EMPLOYED...PROBLEM SOLVED...
And just watch income tax revenue plummet!!
if an employee fails to reach adequate performance levels expected for the position and is given a short time to address the incompetencies they should then be dismissed without ANY payment. employment rights evolved over time to help the needy and stop abuse of the workforce, these particular rights should remain but how ridiculous is it to pay off somebody that cannot or will not perform their job to a satisfactory standards set by the employer. why would a boss want to sack an individual that performs their job well?
The laws already allow for this by first having an official verbal warning then 2 official written warnings, and then if the problems still not addressed the employee can then be fired. What the Tories want is a return to the 1800s.
Will open access mode 4 coming, all skilled staff in this country could be replaced by indian workers (on Indian wages). you may reflect on this when you are sacked for not reaching levels set to enable this to happen.
Need to start with the public sector, pull your weight stop moaning and you don't need three people to open a tin of biscuits. To many people complain when your asked to work that little bit more, bullied, picked on etc. Bosses will always look after good staff "fact", but why should they put up with liberal thinking staff. It is eat or be eaten in the private sector that's what drives competition and growth. It's not all about taken part!!
Since when did being a "liberal thinker" make you a bad worker?
Thought for a second it was about the Police!
As long as this applies to MPS, Government Ministers, Civil Servants, Judges..............................
Jan N Andy Oakley-Hills
It is already hard to take Constructive or Unfair dismissal case - unless you are prepared to take the case to tribunal yourself, there is no legal aid to help you, and a bad employer makes it drag on for months hoping to wear you down and force you into giving up! If you get to tribunal hearing, the employer will have the benefit of lawyers acting on their behalf to confuse the isssues even further, and if they win which is most often the outcome, all their costs can be awarded against you, thereby leaving you not only un-employable,but in debt and possibly losing your home if you own it! So just an illusion of justice to try to keep the workers in their place!!!
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Not all employees live up to expectations. As a hirer you have to take a chance that you have the right person for the job and if you haven't you need to be able to resolve it quickly and then move on. However a hire and fire law smacks of Thatherism in its worse form.
If a company has a good capability procedure then under performers can be dealt with through this.
If an employee does not perform then fine he is not fit for purpose end of however I also see that it could be in the interest of an employee to get sacked if they were to profit from it - surely that is how this proposal reads?
The forces have a moto which stands the test of time " No such thing as a bad soldier, only a bad Officer"
A nation of worker bees thatchers dream still alive. Nothing new under the sun
The few rich get rich by the many poor buying things, if they feel safe in thier job and do it even if the boss does not like them they will continue to borrow and buy. This misguided law will mean even the workers not under threat will protect themselves by, not borrowing, not buying on tick and will pay off all loans as quick as possible, save if possible and save up to buy anything special. Tax and Sack is not the way. The Torys are borrowing more money than labour. With open access mode 4 coming (Look it Up, it will not be on the BBC or news at 10) the middle ages are looming with the east rising.
Cameron says yes to everyting the Lib Dems want but says no to everything his party want and no to every person in the country.