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been due to be published later in the week, but this was brought forward after leaks of what the government called an out-of-date version.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 416.

    If they wanted to make british business more competitive, scrap National Insurance tax and do something about fuel duty.

  • rate this

    Comment number 415.

    As an employer I want the right to let a person go if they prove to be incompetent, or if we need to resize to survive! I don't want this process to be costly or time consuming!
    As it is; our employees get training & thankfully we have never needed to waste that investment by letting anyone go! To stave off 'resizing' we agreed pay restraint with all staff (with only myself taking a 45% pay cut)!

  • rate this

    Comment number 414.

    This doesn’t scare me, it makes me angry. Must be a bout of that increase in extremism Clegg was talking about.

  • rate this

    Comment number 413.

    I once worked for a major UK/US book publisher, which had a surprise cull of staff. You came into work and was told you were no longer wanted. One of my friends was called in to her boss, one of the directors, and sacked. It transpired that my friend was not on the list for redundancy, but the boss just took advantage of the mass sackings to get rid of her because she didn't like her.

  • rate this

    Comment number 412.

    Sorry Vince but on this one you are wrong. Any firm that has spent thousands, training and developing their staff are not likely to get rid of them if they are any good. Would I as an employer want to keep under performing staff - hardly. Would I as a customer want to deal with someone who leaves me wishing I had gone elsewhere - hardly. Staff can either earn their salary or decide to leave.

  • rate this

    Comment number 411.

    Perhaps if we renamed it blue tape?

  • rate this

    Comment number 410.

    So, Cameron wants everyone in work including the severely disabled and yet if they under-perform they will get the sack. What planet is this guy on? He won't be happy until the entire populace are a bunch of raving neurotics...

  • rate this

    Comment number 409.

    Any thing wafted up as new in politics is usually the object of desire from some large self interest group . I suppose it is very easy to find willing elected supporters for most things £££££ even the rewriting of workers basic rights, but only if the price is right !

  • rate this

    Comment number 408.

    I have said before these charity educated idiots,are not fit for purpose but then i bet inserted in this bill will be a exemption for charity educated kids

  • rate this

    Comment number 407.

    The issue here is one of balance. You get some folk that count down the number of days they have left until their probation period is over and they can start to 'slack off'.

  • rate this

    Comment number 406.

    dead wood, ornaments and navy blue china.
    the rot sets in.

  • rate this

    Comment number 405.

    So Mr Cable wants us to keep underperforming staff, he has obviously never had to run his own business

    He was the Chief Economist for Shell, comes from a modest background and was educated through the state school system so having some knowledge of the Real World and having to achieve success on merit He is clearly completely out of place in this Government.

  • rate this

    Comment number 404.

    I was under the impression that the Employer had 2 years to decide whether the employee is up to scratch or not.

    If this is correct surely the law is OK as it.

    As for the Business Secretary saying it will scare people then he needs a reality check. A strong vibrant economy needs competitive companies. Not companies full of dead wood.

  • rate this

    Comment number 403.

    "Shifting responsibility for checking foreign workers' eligibility to work in to the Border Agency..."
    This will definitely not happen. I have read that unlike other members of the EU the previous Labour govt. agreed to unfettered access to by Romanian + another new EU member. The coalition will be foolish to take the rap.
    In any case Can you trust any govt. assurance is real?

  • rate this

    Comment number 402.

    #377 It's proably true that no-one didn't recruit because of labour laws. However I'd look at this measure as being more towards easing the burden on employers when needing to release staff from the threat of an employment tribunal. Case to tribunals: 2008: 151,000, 2009: 236,000 2010: 218,000. A large burden is of claims or threats of claims to an ET being opportunistic to get more payout.

  • rate this

    Comment number 401.

    Removing the liability for third-party harassment from bosses removes their incentive to protect their staff by ordering troublemakers to leave premises. This clause will take us straight back to the days where every barmaid's backside was at risk from slapping and pinching, and landlords turned a blind eye to it for the sake of profit.

  • rate this

    Comment number 400.

    This Government has proved time and time again that they can and will do anything they want to us . We prove time and time again that we will let them.

    So why wouldn't they ?

  • rate this

    Comment number 399.

    There needs to be a balance. I used to work in a local authority and there were lots of lazy people there, but also many hardworking who did in excess of their contracted hours for no additional pay. After the probationary period staff are pretty well unsackable unless they steal from the council or assault someone. Very difficult to get rid of the slackers especially those in senior positions.

  • rate this

    Comment number 398.


    In theory yes. But when said employee pulls the race, gender, martial status, religious views card/s, the male cow excrement hit's the cooling device.

  • rate this

    Comment number 397.

    Does that include all the MPs we don't want because they are not performing according to promises made and expectations including Cleggy and "call me Dave"? We are their paymasters.


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