18 October 2012 10:32
The Government has been forced to defend its plans to reform employment law, saying that the changes are about creating economic growth rather than helping businesses sack workers.
Business minister Jo Swinson denied trying to force through the controversial "no-fault dismissal" which makes it easier for companies to fire workers. She outlined a shake-up she claimed would encourage firms to recruit workers and end the rising number of costly employment tribunals.
But Labour claimed that introducing "settlement agreements", where companies and workers agree to terminate contracts, would destroy fair protections workers enjoy and deter people from spending to spark economic recovery if they feared losing their jobs.
Ms Swinson said the agreements would help parties "come to a consensual end to employment relationships that just aren't working out".
Opening the second date of a report stage debate on the Enterprise and Regulatory Reform Act, she told MPs: "A settlement agreement offers potential benefits to employers and employees, including a much quicker solution than that offered by a tribunal, where the average time taken to resolve a claim is 24 weeks.
"For employers, there is the security they won't face a tribunal case distracting them and other workers from their business activities.
"For employees, they end up with the certainty of a cash payment, they avoid the time and stress of a tribunal and they leave with their head held high and possibly a reference."
She added: "We want to encourage more businesses and individuals to consider their use as viable and potentially preferable means of parting ways (rather) than an emotionally-draining management conduct route, or a costly and stressful employment tribunal."
MPs voted by 279 to 224 to keep a clause which will allow company bosses to have conversations with employees about terminating their contract, in the knowledge they cannot be used at a later date against them in an employment tribunal.
And MPs also approved, by 290 votes to 223, a clause Labour wanted to see removed which could limit the compensation payouts in some cases.