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27 October 2011

Cable rejects unfair dismissal proposals

The Business Secretary says there is "no evidence" to back up claims in Downing Street report leaked

By Samira Shackle

Vince Cable has rejected the suggestion, put forward by Adrian Beecroft, that unfair dismissal laws should be scrapped. As I blogged yesterday, a report by the venture capitalist commissioned by Downing Street claimed that the laws were hindering efficiency and growth by making it too difficult for employers to sack unproductive members of staff. It went so far as to say that this was the “first” problem facing British enterprise.

Asked about the proposals during a speech on growth at the Policy Exchange think-tank, Cable stressed that it was not an official report. He dismissed the central argument:

No evidence has been advanced that I have seen that it will improve labour market flexibility in general, or have any beneficial effect, but if anyone can produce any, we will look at it.

He also added that unemployment has not shot up due to a lack of flexibility in the labour market, and commended the flexibility of business and workers during the recession:

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There was a great deal of flexibility shown by our employees as well as the employers. I go round a lot of our industrial plants. The unions have their formal positions, but it is very clear they are committed to their companies and are very flexible about working practices so the world has changed an awful lot in the last 30 years in a positive way.

According to aides, Cable and the Employment Minister, Ed Davey, are fighting to ensure that plans for growth do not end up with a narrow-focus on restrictive employment laws. However, George Osborne has already announced a range of measures which will make it easier to sack people. In the reforms that have gone through, people are only entitled to claim unfair dismissal when they have been working for at least two years. With further proposals expected on sick pay, it is urgent that this does not become an all-out assault on workers’ rights at a time when employment is already so unstable.

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