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Vince Cable announces plans to simplify hiring and firing

23 November 2011

Business Secretary Vince Cable has detailed changes to employment law designed to make it easier for small businesses to let employees go.

Following a consultation on resolving workplace disputes and the Red Tape Challenge review, the Government will consider exempting "micro-firms" (those with fewer than 10 employees) from employment regulations, simplify the employment tribunal system and increase the cut-off for unfair dismissal claims from one to two years.

The measures are part of a package designed to encourage small businesses to grow by making in simpler to take on and let go of employees.

The key points include:

â- Consultation on allowing employers to have discussions about poor performance without fear that they could be used as evidence in a tribunal
â- Consultation on the cost of tribunal to be transferred from taxpayer to claimant
â- Call for evidence on reducing the a consultation period on planned redundancies from 90 days to 30
â- All claims to go to the conciliation service Acas before reaching employment tribunal
â- A "rapid resolution scheme" for simple cases to be settled within three months

Cable said that he recognised that many employers felt that employment law was 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," he added.

"But let me be clear: we are not rebalancing 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."

The British Retail Consortium (BRC) said the plans were a commonsense way of streamlining the tribunal process.

Director general Stephen Robertson said: "Retailers are particularly dependent on their staff for the success of their businesses. Good working relationships are highly valued and they only break down in a tiny minority of cases.

"On the few occasions when things do go wrong, the current tribunal process is often too slow and too costly. The plans announced by Vince Cable should help weed out vexatious cases and make it easier to resolve disputes quickly and in the workplace.

"Removing deterrents to hiring new staff and reducing unnecessary employment costs will help retailers create the jobs the country needs. The Government should take these proposals forward as quickly as possible."

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By James Stagg

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