Vince Cable calls sacking plans in Beecroft report 'the wrong approach'


Speaking in May this year Vince Cable criticised proposals to make it easier for firms to fire staff

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Business Secretary Vince Cable has condemned proposals to make it easier for firms to sack under-performing staff as "the wrong approach".

A report commissioned by the prime minister is also expected to call for shorter periods of consultation over compulsory redundancies.

But Mr Cable told the BBC it was not the job of government to "scare the wits" out of people.

Many Tory MPs back the plans as a means to boost the UK's businesses.

The economy re-entered recession in the first quarter of this year and the coalition government is looking for ways to encourage growth.

The report, which was published on Monday, was compiled by Conservative-supporting venture capitalist Adrian Beecroft.

Its proposals include:

  • An end to a mandatory 90-day consultation period when a company is considering redundancy programmes. Instead it will suggest a standard 30-day period and an emergency five-day period if a firm is in severe distress
  • A cap on loss-of-earnings compensation for employees who make successful discriminatory dismissal claims
  • Reform of the rights that workers are allowed to "carry" to new employers when their companies are the subject of a takeover
  • Scrapping provisions in the Equality Act which make employers liable for claims from employees for "third-party harassment", such as customers making "sexist" comments to staff in a restaurant
  • Shifting responsibility for checking foreign workers' eligibility to work in the UK from employers to the Border Agency or the Home Office

The study follows David Cameron's call for British industry to be freed from "red tape".

Changes to employment law, it is argued, would improve the supply of suitable staff to firms, who would be less afraid of having to make large payouts or face legal action when laying off those who are no longer needed.

The theory is that firms would hire more staff and the change would make the UK a more attractive place to start and grow a business.

The plans, which have not been accepted by the prime minister, have been portrayed as a source of tension between Conservatives and Liberal Democrats.

The Beecroft Report had been due to be published later in the week, but this was brought forward after leaks of what the government called an out-of-date version.

Business minister Mark Prisk told the Commons that action was already being taken on 17 of the 23 Beecroft recommendations.

Mr Cable told the BBC: "Most of it is pretty uncontroversial, but there's one bit which is this so-called 'no-fault dismissal', which some people describe as a hire-and-fire system.

"I don't see the role for that. Britain has already got a very flexible, cooperative labour force. We don't need to scare the wits out of workers with threats to dismiss them. It's completely the wrong approach."

But Mr Cable's department has issued a call for evidence to see whether firms with fewer than 10 employees would favour the no-fault dismissal rule.

When asked whether there was a difference of view between himself and Downing street, he said: "I think we're all on the same page."

'Right direction'

Mr Cable has reportedly spoken several times via telephone to Labour leader Ed Miliband since the coalition came to power.

Mr Miliband refused to be drawn on the claims, adding that he had conversed with "lots of people lots of times".

However, his comments on the Beecroft proposals echoed those of the business secretary: "We need an economy based on long-termism, investment and training. We need to get away from an economy based on a short-term, take-what-you-can, fire-at-will culture."

But Conservative MP Damian Collins said: "It would be terrible if smaller businesses were holding back on recruiting because they're worried about whether they can sustain the income they need to keep those people on over the longer period of time."

The prime minister's spokeswoman said the government wanted to "support business, encourage growth, while at the same time ensuring that employees rights to work were not weakened".

She added: "The PM is not wedded to one set of proposals or another, but he does believe he should look at what can make the process (on employment) easier."

Adam Marshall, director of policy at the British Chambers of Commerce, said: "Of course employment rights are important, but should be weighed against opportunities for the unemployed who are looking for work."


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  • rate this

    Comment number 96.

    Old ideas of bashing the workers is really not going to help resolve a difficult economic situation caused by corporate greed and criminality. We can't go back to the Victorian age. Who is this guy ?

  • rate this

    Comment number 95.

    Grandpa Vince, can I suggest that it is YOU who is in fact scaring the wits out of people by suggesting their is something to be scared about in the first place. If you do a good job, and there is a business need to employ you then no worries. If you're not up to it, why should I continue to employ you? Can we focus this on the Public Sector too, please? Maybe a new Business Secretary perchance?

  • rate this

    Comment number 94.

    We should start sacking politicians when they under perform too.

  • rate this

    Comment number 93.

    Cable is one of the very few MP's who has actually had a real job in the real world so he does have a lot of experience unlike most MP's.
    Its just a shame employment rules don't seem to apply to our MP's who committed fraud with their expenses but got way with it virtually unscathed.

  • rate this

    Comment number 92.

    Does this mean we can sack the underperforming coalition? Or are politicians exempt as usual?

  • rate this

    Comment number 91.

    As a small employer I can tell you that employment law as it stands is definitely putting us off hiring right now.

    These changes (no fault dismissal in particular) would definitely make me more likely to hire another person or two.

    Nice to see something being discussed that will actually help create the conditions for growth.

  • rate this

    Comment number 90.

    Very, very depressing, reading some of these, to see how naturally comes forelock-tugging to so many Anglo-Saxons, apparently.

  • rate this

    Comment number 89.

    So you make it easier to sack thousands of workers, leaving them unable to afford to buy any goods and services. And all the workers you didn't sack stop spending just in case you're planning to sack them at some point. Then the businesses who were depending on the workers, sacked and unsacked, to buy their goods go bust, leading to yet more unemployment.

    Can somebody please think of a plan B?!

  • rate this

    Comment number 88.

    I recall hearing a minister on the Daily Politics recently, if I remember correctly, Grant Shapps, saying it ought to be "easier to sack people whose faces don't fit" - its not necessarily that they 're particularly bad workers but sometimes people just don't fit in he said. One has to assume that is what the Tory part of the government would like to see.

  • rate this

    Comment number 87.

    Any businessman who says he fears employing someone in case they end up incompetent and he can't fire them is a liar. There are no barriers to firing people who do not do the job they were contracted to do - the only barriers are against employers who lie about the reasons for firing someone.

    Of course, a desperate casual workforce who can be easily abused would be in the interests of some.

  • rate this

    Comment number 86.

    Thing is, the cap on payments for unfair dismissal doesn't strike me as being so much about protecting managers from bad workers as protecting bad managers. We have employment laws in this country for a reason, just look up conditions before they existed.

    Change the weighting on that to allow managers to minimize the damage from abusing employees and they WILL exploit it.

  • rate this

    Comment number 85.


    "Mr Cable and his Lib Dems should shut up. Why are they so pathethic and wet ? What a shower !"

    Yeah, only an idiot would go into Coalition with them?


  • rate this

    Comment number 84.

    What's next? Lining up in the moring to see if there is any work that day? Many staff are already "scared witless" and hang on to jobs where both parties have long fallen out of love for fear of not being able to get another job, or of losiung precious redundancy rights, pensions or to sheer fear of having to compete for jobs. Vince is righ- bad news for workers

  • rate this

    Comment number 83.

    How about making it easier to sack MPs who dont live up to their promises mid term, or fire bankers who created a mess in the financial system. All we seem to hear from Cable, Clegg and Cameron is initiatives and policies that affect the working man and woman and the poor. Why are we not seeing more policies aimed at tax dodgers and crooked bankers and MPs?

  • rate this

    Comment number 82.

    "Don't scare workers, urges Cable"

    Too late in many cases
    Those that can, usually the most capable, leave under their own steam to do something more worthwhile with their existence

    Who in their right mind would want to make profits for the evil, helping the evil to become ever more rich and powerful

    Only those with no choice in the matter will stay to help the evil prosper

  • rate this

    Comment number 81.

    I've worked as a temp for the NHS for 3 years because permanent jobs are advertised mainly as 'internal only'. The pay and conditions of those who work out of the public eye in hospitals are disgusting and I was recently 'released' from my post in an NHS hospital because I became ill because of the poor conditions and had to be hospitalised myself! So the NHS made me ill AND then made be jobless

  • rate this

    Comment number 80.

    And the right approach is what exactly Vince? There's a big difference between scaremongering, and giving a company the ability to sack underperforming staff; something that seem near impossible at the moment, certainly in the public sector!

    If we want to get the economy back on it's feet, getting rid of those carried by others would be a good start, imo.

  • rate this

    Comment number 79.

    Will we see a few bank executives sacked too? I thought not.

  • rate this

    Comment number 78.

    As if the economy is going to grow, people are already in fear of losing their jobs because of the cuts now they'll be even more insecure. All that insecurity will only lead to reduced spending and a continuation of our shrinking economy. Seems the Gov are seeing just how bad can they mess up this country. (Unless of course you're part of the 1%)

  • rate this

    Comment number 77.

    Over the years I've witnessed many of my colleagues being hounded, threatened, bullied and finally sacked by unscrupulous employers who know how to play the game and intimidate employees while keeping their actions within legally accepted limits. Then, it happened to me - twice! Had it not been for my Union I would have lost everything and come away without a penny.


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