Commenting on the proposals announced by Vince Cable on the proposed employment law changes, Dr Adam Marshall, Director of Policy at the British Chambers of Commerce (BCC), said:

“Employers will be encouraged that the government is taking steps to reduce the burden of the employment system and create a more flexible labour market. Dismissal is always a last resort, but is at times necessary to protect a business and other members of staff. The fear of malicious tribunal claims and an unnecessarily antagonistic dismissal process has a chilling effect on employment. We would urge the government to move swiftly from consultation to implementation on settlement agreements and lower tribunal awards, as these proposals will boost confidence when businesses on the ground can see them in action. 

On settlement agreements:

“In those unfortunate circumstances when businesses have to end the employment relationship, settlement agreements provide a speedy and consensual way to avoid disputes. Companies need to be confident that they can offer an employee a settlement to end the relationship without fear of future claims. We support moves by the government to make the process of offering a settlement easier to navigate without paying for specialist advice.”

On limiting tribunal awards:

“The current maximum award for unfair dismissal vastly exceeds the reality of most cases, but prevents many employers from seeking justice, and puts many more off hiring all together. The upper limit should be reduced and this would significantly increase employers’ confidence to challenge unmeritorious claims and recruit more staff.”

On tribunal reforms:

“These measures form part of a broader government agenda to reform the tribunal system and ensure it becomes less of a barrier to employment and economic prosperity. Although employers have welcomed efforts to deter vexatious claims by introducing fees for claimants, that policy will be undermined if the system of remissions means that just a quarter have to pay the full fee. The government must get a grip and ensure that all those who can afford the fee are made to pay.”

On additional changes needed to boost employment and confidence: 

“These measures will boost employers’ confidence and lead them to create additional jobs, but will be undermined by upcoming government proposals on extending the right to request flexible working and shared parental leave. Extending the right to request to all workers will make it more difficult for employers to accommodate requests from those with caring duties. Similarly while we support the objective of helping mothers who want to return to work to do so, we are yet to see proposals on flexible parental leave that are workable.”