Michael Fallon, a key ally of David Cameron, said the new plans would deal with the “burdensome” and “expensive” problem of getting rid of unwanted staff.
Pressure from the Liberal Democrats forced the Coalition to shelve plans for “no-fault dismissal” earlier this year, which would have allowed small companies to fire people without blame.Mr Fallon said the Coalition is “not going back to fire at will”. But he claimed ministers are still committed to making it easier to sack people.
“Absolutely, there are going to be changes announced later this week, because we do want to deal with the burdensome nature of hiring and firing people, the cost of tribunals," he said. "A lot of small businesses are worrying that if they do take on somebody extra and they’re not sure whether they perform well and they turn out not to be a help to their firm, that it’s going to be very expensive and take a lot of management time to get rid of them.“We need to get away from the adversarial, expensive and cumbersome tribunal system and make it much easier and quicker for people to reach negotiated settlements.”
Speaking to the BBC, Mr Fallon admitted he has a “different perspective” to his boss, Vince Cable, the Business Secretary.
Dr Cable, one of the Coalition's most senior Liberal Democrats, yesterday said he is “very firmly against a hire and fire system”.
"There are already reforms, which I’ve introduced, to the tribunal system that get rid of the bureaucracy around labour disputes,” the Liberal Democrat told the BBC's Andrew Marr Show on Sunday. “I’ve set my self very firmly against a hire and fire system. It isn’t necessary.”Dr Cable also pointed out that Mr Fallon is "not actually responsible for employment law".
The two business ministers presented a united front at a press conference this morning, where they promised to put fresh effort into reducing regulations for small businesses.
Under their plans, hundreds of thousands of businesses are to be exempted from health and safety inspections to protect them from "compensation culture" claims.More than 3,000 regulations will be scrapped or overhauled, so that shops, offices, pubs and clubs will no longer face excessive scrutiny.
The employment reforms are due to be announced later this week. They are expected to include new guidelines suggesting that companies and staff resolve disputes through voluntary settlements, rather than complex tribunals.