BUSINESS secretary Vince Cable has launched what he says is the most radical reform to employment laws in decades.
A package of measures will, the government says, retain key protections for employees, but also fundamentally improve the way employers take people on, manage disputes and let people go.
Changes will include an overhaul of employment tribunals, which is expected to deliver £40 million a year in benefits to employers.
Ministers will also start a call for evidence on whether the 90 day minimum consultation period for collective redundancies is restricting businesses and should be reduced.
Mr Cable said: “Our labour market is already one of the most flexible in the world. This flexibility benefits businesses, staff and the wider economy. But many employers still feel that employment law is a barrier to growing their business.
“We’re knocking down that barrier today - getting the state out of the way, making it easier for businesses to take on staff and improving the process for when staff have to be let go.
“But let me be clear: we are not re-balancing employment law simply in the direction of employers. Our proposals strike an appropriate balance and we are keeping the necessary protections already in place to protect employees. Our proposals are not - emphatically not – an attempt to give businesses an easy ride at the expense of their staff. Nor have we made a cynical choice to favour flexibility over fairness.
“We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business. Tribunals should be a last resort for workplace problems which is why we want disputes to be solved in other ways.”
In response to the suggestion that dismissal laws are too onerous for small businesses in particular, the government will launch a call for evidence on two proposals.
Firstly it will seek views on a proposal to introduce compensated no fault dismissal for micro firms, with fewer than 10 employees. Secondly, it will look at ways to slim down existing dismissal processes, how they might be simplified, including potentially working with the Advisory, Conciliation and Arbitration Service (Acas) to make changes to their Code, or supplementary guidance for small businesses.
Proposals resulting from the Red Tape Challenge include a call for evidence on the consultation rules for collective redundancies and whether the current 90 day minimum period for more than 100 redundancies can be reduced. Ministers are keen to see what impact this has on the restructuring of businesses, whether this acts as a barrier to employer flexibility in the labour market and how any change might affect employees’ access to alternative employment or training.
The government will has proposed simplifying the Transfer of Undertakings (Protection of Employment) - TUPE - rules which, for example, protect contracts of people in the public sector when businesses are privatised. Many businesses say TUPE rules are too complex and bureaucratic.
Some of these changes will require the government to introduce new laws and that will be subject to the Parliamentary timetable.