Underperforming employees targeted by employment law changes


The Coalition Government are convinced that the solution to the high unemployment rate is to introduce changes to employment law that will make it easier for companies to fire staff. This approach has been widely criticised as weakening the protection enjoyed by employees under employment law.
The Government has already introduced changes to the time period that an employee is required to have been with their employer before they can claim for unfair dismissal. The Business Secretary, Vince Cable, is now introducing further changes to streamline employment-law cases, and limit the amount of damages that an employee can claim for unfair dismissal.

I say goodbye, you say hello?

The Business Secretary thinks that by making it easier for employers to dismiss staff, companies will start hiring more. However, the opposition is arguing that this is a false dichotomy as there is no evidence to this effect.

What does the announcement entail?

Cable is also looking to make it easier for companies to use settlement agreements, which is coherent with the Government's wish to derail cases from the court system.
Compromise agreements are used by employers when they wish to let an employee go, but want to ensure that the dismissed will not bring a case for unfair dismissal. If the employee agrees, then they will not be able to bring a claim for unfair dismissal to an employment tribunal. There is a risk that the increased use of such agreements will let bad employers of the hook, and make it difficult for parties who have suffered wrongdoing from bringing their genuine claim.
Moreover, Cable is also intending to have a consultation on introducing a cap on unfair-dismissal payouts to the equivalent of the amount of a 12-month salary. Currently, the maximum amount of compensation for unfair dismissal is set at £72,000. However, this amount is only awarded in a small number of cases.
The changes introduced are aimed at underperforming employees, and are supposed to make it easy for employers to dismiss them. However, the measures fail to realise that what companies are lacking is a demand for their services, which will not be improved by the hiring and firing of staff. Employees are already in a vulnerable position in the employment relationship, and it is crucial that the law is there to support them.
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