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been due to be published later in the week, but this was brought forward after leaks of what the government called an out-of-date version.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 396.

    Unlike Germany and France the UK has always been able to make staff redundant with the utmost ease. The UK telecommunications sector, taken over by US and German companies, simply made people reapply for jobs by changing job titles even though the work was always the same. Red tape?

  • rate this

    Comment number 395.


    This would be an open ended get rid of anybody who falls out with the boss rule and god help anyone who gets old or has a long term illness and whats to stop firms from sacking people and re-employing people on lower wages and worse conditions."

    Exactly. All the employment rules we have now were self inflicted by business trying to cut corners. OTT? Maybe, but the trust isn't there.

  • rate this

    Comment number 394.

    Employment of labour use to be so an employer could achieve a productive outcome and make a profit that was an adequate return on the money and assets invested.
    The price of that labour was determined by the market value of the skills required to produce that return.
    Instead we now have employment as a social service and we wonder why it all went wrong.

  • rate this

    Comment number 393.

    All in all, it's not exactly a shining indictment of management in the UK if their preferred option when faced with a 'difficult' member of staff is to sack them.

    Maybe they should, you know, manage them? After all, that's what they are supposedly paid to do...

    There's nothing wrong with sacking people through the correct procedures, but where is the measure for management quality?

  • rate this

    Comment number 392.

    Looks like the Tories have become recruiting Sargents for the Unions.

  • rate this

    Comment number 391.

    No suprise who seems to be thinking of the consequences of these changes for ordinary folk.

    Cable seems to be the only one in gov't with half an ounce of sense.

    I'd even credit him with a full ounce if he wasn't in this gov't

  • rate this

    Comment number 390.

    LMAO at all the kill those rich filthy Tories comments on here! Talk about discrimination! I have never seen such default hatred towards someone as some people on here show towards anyone that is not a socialist, leftist or liberal!

    The only logical outcome if these people had their way is communism! It's that bad!

    Ask who is a fan of communism in Eastern Europe and you'll see how bad this is!

  • rate this

    Comment number 389.

    Wouldn't it be terrible if some of the people who voted in this appalling government lost their jobs BECAUSE they voted for this appalling government. Then again...

  • rate this

    Comment number 388.

    Tories approach this subject as if vindictive,spiteful employers do not exist. Nobody should be sacked without good reason. Whats wrong with that 'approach'?

  • rate this

    Comment number 387.

    Imagine the scorn that would be poured upon a union authored employment rights report commissioned by Labour.

    Are we really in a world where a venture capitalist authored employment rights report commissioned by the Tories should carry any weight?

    Is someone having a giraffe?

  • rate this

    Comment number 386.


    "What happened to the idea of making it easier to sack underperforming MP's? If that had come through we'd have got rid Nick and Dave months ago"

    We already have a process judged over 4-5 years or called a General Election

    Spot judgements of performance and dismissal (crime and exceptional disciplinary offences etc excluded) are no more appropriate for MP's than for workers

  • rate this

    Comment number 385.

    This would be an open ended get rid of anybody who falls out with the boss rule and god help anyone who gets old or has a long term illness and whats to stop firms from sacking people and re-employing people on lower wages and worse conditions. Business should realise that it is the people who do the work that make the profit and any employees should be valued and not treated as disposable.

  • rate this

    Comment number 384.

    Just read, People from overseas who come from Countries with high a TB rate are to be screened before getting a visa -- YES THEY WERE NOT ALREADY DOING IT. This is the Government who want to pass this Legislation. They can start with the Minister in charge of this idiocy.

  • rate this

    Comment number 383.

    This policy will do nothing for employee loyalty or shop floor relationships. a bad idea......

  • Comment number 382.

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

  • rate this

    Comment number 381.

    Tebbit's on your bike policy did not work - people want to stay with their families in their communities - so start bringing jobs for long term growth into the local community. Short term hire and fire policies will not help the UK - at all, only the Tories to stay in power at the next election - see #372 inqa - quite right.

  • rate this

    Comment number 380.

    But Mr Cable told the BBC it was not the job of government to "scare the wits" out of people. Mr Cable must be wearing blindfolds then, the people of Britain are scared to death wondering what the next disaster this Government has planned for us all to suffer, there are not many industries left that they have not tried to rip apart.

  • rate this

    Comment number 379.

    Completely out of touch with reality!

  • rate this

    Comment number 378.

    Beecroft seems to be saying there needs -in effect - to be a 2-year probation period. No-one who has worked for a firm beyond that is under threat, Provided there is compesation of sorts at the end of this period then that is fine. To anyone who says it is easy to get rid of under-performers, especially in the civil service or NHS - let alone commerce - shows they haven't got a clue.

  • rate this

    Comment number 377.

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


    My wife and I ran a recruitment agency and I can't say any employer ever indicated that the reason why they didn't take someone on was because they were concerned they couldn't sack them easily.

    This will make no difference to new employment and is bonkers!


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