Vince Cable plans new arrangements for firms to axe staff

Business Secretary Vince Cable has announced plans to make it easier for firms to remove under-performing workers in return for a pay-off.Vince Cable plans new arrangements for firms to axe staffUsing “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 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 Lib Dem minister announced 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.

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.

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”.

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.

August 9, 2012 · Home Based Jobs · Comments Closed
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