Employees could have less protection against redundancy and workplace discrimination under coalition government proposals to revamp UK employment law.
Chancellor George Osborne told the Institute of Directors’ annual convention in London yesterday that the aim of his “wholesale review” of employment legislation was to support job creation in the private sector. He would do this by removing unnecessary bureaucracy and ensuring that employers could take a more “flexible” approach towards their workers, he said.
Coalition government budget cuts are expected to result in more than half a million public sector job cuts and it is hoping that the private sector will be able to make up the shortfall. As a result, it was important not to “shy away from looking at difficult issues”, Osborne said.
But shadow business secretary John Denham was scathing of the plans. “George Osborne’s only idea for growth is to make it easier to cut pay and pensions, dismiss employees without giving time to plan for the future and make working life more insecure. Successful companies have a workforce that is confident, dedicated and fairly rewarded,” he said.
Osborne’s proposals will target three key areas of employment legislation – TUPE, redundancy and employment tribunals. TUPE regulations, which safeguard employees’ pay and conditions when they are transferred from one employer to another, are to be reviewed because some employers think such rights are ‘gold-plated’ and overly bureaucratic.
Changes to the consultation period for making collective redundancies are likewise to be re-assessed. Under current rules, employers must inform the Business Secretary if they are to make more than 100 workers redundant within 90 days. The objective is to reduce this timescale to 30 days in order weaken the ability of employees and trade unions to react.
In relation to employment tribunals, the objective is to impose a cap on compensation awards in the case of workplace discrimination and abuse on the grounds of race or gender. Unlimited penalties would be scrapped and new rules introduced in order to prevent “weak, speculative or vexatious” claims by those workers hoping to get large payouts.
Such changes to discrimination compensation could be difficult to push through, however, as they are underpinned by European legislation.
