The Chancellor has urged business leaders to support moves by the government for a “wholesale review” of employment law in the face of union opposition.
Union leaders accused the government of planning a “bonfire” of policies designed to protect workers, expressing “astonishment” at the scale of the review.
Ministers announced a consultation on cutting compensation payments for discrimination, reducing the current 90-day timescale for firms to consult over job losses, and changing the TUPE regulations which protect the pay and conditions of public sector workers transferred between companies.
George Osborne told the Institute of Directors (IoD) that for many years, ministers had not been willing to tackle the “costly impact” of employment laws and regulations.
“The government will publish a detailed timetable for the wholesale review of employment law in this country,” he told the IoD’s annual convention in London.
He said the review included plans to review unlimited penalties in discrimination cases at employment tribunals, simplify administration of the national minimum wage, review the TUPE regulations and reform the 90-day consultation period for redundancies.
“Some of these may be controversial. Unions and interest groups may oppose them. So I say to the business community, don’t be passive observers. Get stuck into the argument and support us in making the case for growth.”
Len McCluskey, leader of Unite, said: “The government wants to make a bonfire of alleged red tape - the labour movement should be getting out the hose pipes to extinguish these small-minded plans.”
Unison leader Dave Prentis said: “The Tory review of employment law will hit ordinary working people hard. The government is weighting the jobs market heavily in favour of bosses, who will be able to hire and fire their staff at will.
“The Tories have not even bothered to disguise this review as fair. It is unashamedly on the side of big business. We are astonished that the government has not taken a more constructive approach, and will be seeking urgent talks on this review.”
Katja Hall, the CBI’s chief policy director, said: “A review of employment law is long overdue. Workplace relationships have changed dramatically over the last decade, with employers and employees engaging in a more flexible, personalised way, and it’s time the law reflected this.
“The government is right to look at ways of reducing regulatory burdens on businesses, because this will help free them up to create jobs and drive growth.”
David Frost, director general of the British Chambers of Commerce, said: “When the government announced measures to reduce regulations that stop businesses recruiting, we said the reality had to match the rhetoric. We welcome these moves to review rules for collective redundancy, TUPE and levels of compensation for discrimination cases, but there is still more work to do.
“The government’s review of employment law must result in changes to rid businesses of onerous regulations that prevent them taking on staff and growing.”