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been due to be published later in the week, but this was brought forward after leaks of what the government called an out-of-date version.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 116.

    Labour will be against it per se because Chuka Umunna used to be an employment lawyer and will fight these proposals tooth and nail. Labour has too many lawyers past and present. All too often we have seen changes to legislation made or blocked because of the vested interests of the legal gravy train.

  • Comment number 115.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 114.

    Employment law is quite specific. If someone is not up to scratch you discipline them and if they dont improve you can sack them. If bosses are now too lazy to follow a simple system why should all employee's suffer.

  • rate this

    Comment number 113.

    This is nothing to do with making it easier to hire people as employers would like to have us believe. Its a charter for mass lay offs.

  • rate this

    Comment number 112.

    Here come the Tories, stomping all over employees, as well as the sick, the disabled, the terminally ill.

    Oh come on now, you didn't think the workers of Briton would be held with any regard by this bunch did you? It's all stealing from your pocket, and shutting down any methods of redress.

    Good luck getting any form of justice in the UK, the Tories have ensured it can only be bought for £££

  • rate this

    Comment number 111.

    You do wonder what type of business secretary Vince actually is. This isn't about scaring workers but it is about doing away with a culture where it's very hard to get rid of poor performers. I've had colleagues in the past who have been lazy and disruptive but almost impossible to get rid of. I can't imagine how bad it must be in France and other European countries.

  • rate this

    Comment number 110.

    This is all well and good but you could end up losing your job just because someone doesn't like you for whatever reason...I've known this happen to people before. Managers and supervisors are the worst offenders for trying to get people the sack, though most of them are no good at their job. I worry about this being brought in...thankfully I am nearing the end of my working life.

  • rate this

    Comment number 109.

    I personally know a mechanic, he has been in the motor trade over 30 years. he has been redundant 5 times. Each time the business was put into administration. he did not get paid for the month he had just worked, notice or redundancy pay. Each time the garage owner had sold the land the business stood on for £ms & retired. So no, there is no worker protection in this country,

  • rate this

    Comment number 108.

    Did you know that someone who goes on maternity leave and takes the full year entitlement does not have to come back to work at the end of that year because they also now have built up their annual paid leave? They have to tack their entitlement on to the end even if your company has a no roll over clause in the contract.
    You couldn't make it up. This is one of the EU regulations.

  • rate this

    Comment number 107.

    It seems to me that "venture capitalist Adrian Beecroft" wants to make it easier for himself to make more money quicker judging by the first 3 bullet points.

    Last bullet point regarding foreign workers is a very good one I think

  • rate this

    Comment number 106.

    It's not what you know it's who you know. Bosses can kick anyone out it just depends if they are smart enough to take you on afterwards!

  • rate this

    Comment number 105.

    @56 Mr Cable and his Lib Dems are the only thing standing in the way of an extremely nasty right wing Tory government of the kind we endured in the eighties

  • rate this

    Comment number 104.

    The current system has been in place for sometime, affects a minimum of companies /people. While there are abuses it serves both sides well.

    True it can be tweaked and this should be done as appropriate. Unfortunately we have politicians who know little of real life. This sort of report is comical if we really are, "all in it together".

  • rate this

    Comment number 103.

    Well managed private sector doesn't really have a problem. Proper assessment/review, objectives that are related directly to customer service, product quality and profit, you're either up the job or you're not. Dead wood puts everyone's job at risk.
    Comments please on how this might be tried in the public sector.

  • rate this

    Comment number 102.

    Just an exacerbation of John Majors bid for a 'more flexible work force'.'

    What that lead to was an increase in part time temporary jobs with workers wondering where their next Mortgage payment would come from.

    We have some of weakest employment rights in Europe. Germany, arguably the strongest economy in Europe has the best industrial relations & strong unions.
    Are British bosses the problem?

  • rate this

    Comment number 101.

    And there was me thinking that giving ordinary workers (i.e. the vast majority) job stability and therefore confidence to spend would kick-start the economy...

    Obviously a few ten thousand execs and owners really need this power to sack to get things going, and not, er, easier access to credit.

  • rate this

    Comment number 100.

    well if a company can get worker to do same job for less money or two workers for same money as one, they will that how the business world work. just because you do good job does not entitle you to a job.
    company are in bussiness to make money. employing workers is mean to that end nothing more nothing less.

  • rate this

    Comment number 99.

    There are some who abuse the position of being employed. Going for fag breaks and then going for their lunch break. Texting friends, surfing the web, facebook or tweeting all day.
    Yes, often there are problems with dictatorial management but at the same time, many people don't do the work they are being paid for.
    There needs to be a healthy balance but employees are being paid to work.

  • rate this

    Comment number 98.

    Is it me but isn't performance a comparative thing, e.g. the retirement age is to be 68 or even 70 or more so at 65 we'll certainly be clapped out and under-performing? Especially if for 50+ years we've been forced to work hard or get the sack. Most of us will be receiving a DIS pension - Death In Service - just enough to bury us.

  • rate this

    Comment number 97.

    The fear of finding oneself with a 'sitting tenant' scares a lot of employers. My son would willingly take on new staff, if for a second, he thought that he would not get stitched up by the system. He finds it way more cost-effective to keep his business small. (Some years ago he took on a trainee, who ended up costing him thousands to get rid of. Their father was a trades union official.)


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