Employment reforms announced today will make it easier for new businesses to thrive. What does this mean for contractors and external providers?

New Employment Laws

Vince Cable, the business secretary, will announce a raft of employment reforms today which will see the biggest changes to employment law for thirty years. The Guardian reports that Cable will announce the following employment reforms in his speech today:

• A consultation on introducing “protected conversations” to allow employers to discuss an employee’s poor performance or retirement in an open way that could not be used in a tribunal claim.
• An overhaul of tribunals that would mean all claims initially go to the Advisory, Conciliation and Arbitration Service. Witness expenses would be ended and only one judge would be used in unfair dismissal cases.
• A further consultation on simplifying the use of compromise agreements in which employers pay an agreed amount to an employee if both sides agree that a contract of employment should end.

Crucially, Cable is set to add that he will await a call for evidence from the Beecroft report to back up claims that businesses who employ less than ten staff should be exempt from the new laws. By announcing the reforms, Cable hopes to “strike a balance” between good employment protection for employees and an environment that allows new start-ups and small businesses to expand. Liberalising employment laws falls in line with the wider aims of the government’s autumn statement, which includes credit easing, increasing lending to small and medium-sized enterprises and speeding up infrastructure projects.

The employment reforms have been met with widespread criticism from union bosses, who claim that reducing employment protection for employees does nothing to improve the country’s unemployment crisis. However, Dr Adam Marshall, Director of Policy at the British Chambers of Commerce (BCC) believes the employment reforms will remove the barriers to confidence, growth and job creation.

Our Opinion

Transcription Global are interested to hear how these reforms might affect contractors and external providers of services such as transcription, translation and interpretation. Our first thought is that by supposedly freeing companies from red tape, it will allow them to streamline and take more risks with their short-term business plan. The recommendation from the Beecroft report, although controversial, will give start-ups and new businesses the confidence to break the mould and should inspire innovation. If this is combined with increased lending to small and medium-sized enterprises as Osborne promises, it could prove fruitful for contractors and external providers who offer a more efficient and cost-effective outsourcing solution.

A full transcript of Cable’s speech can be found here. What are your thoughts on the employment reforms being put in place?