Proposals to reform business tribunals have been put forward today by Vince Cable. If passed, these changes will certainly be a step in the right direction, but not enough to ensure that the private sector is free to lead the economic recovery, which is vital to shake off the mammoth national debt and overcome the structural deficit.
The proposals include an extension of the qualifying period for unfair dismissals from one to two years, fees for bringing a claim to lessen vexatious litigation, and the creation of a compulsory mediation stage with the Advisory, Conciliation and Arbitration Service (Acas) to screen out unnecessary cases.
Although never pleasant for the person being laid off, easing regulations allowing companies to sack their workers with greater ease, will lead to better outcomes. This is to allow the “churn” of employment vital to modern dynamic economy. Sir Richard Lambert, the former CBI Director-General, defended the “churn” in his final speech earlier this week: “in the past 12 months, there have been over 600,000 lay-offs – and yet aggregate employment has risen by around 250,000.” Quite right. If the government is going to take an interest in employment matters, it shouldn’t be concerned with the number of people losing their jobs, but with the aggregate. And the best way to get the government can get this churn is through low taxes and deregulation.
Yet the Business Secretary is still just tinkering at the edges when what we need is need a bonfire of bureaucracy. Sir Richard Lambert’s in the aforementioned speech he suggests a few places to start. I would add his extensive list the need to scrap the minimum wage or at least get freeze it while the Low Pay Commission (LPC) marching orders.
In the medium to long term though, this government or the next must get a handle on the regulations imposed by the terms of our membership of European Union. If this country is not to be dragged in to Europe’s stagnant condition, a government will need to renegotiate our membership so that it precludes the European Commission’s and the European Court of Justice’s involvement in employment and social policy and law. Without this, there is little that any Business Secretary can do.