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Six months pay if employment ends.

Comment 9th July 2010

Instead of the extensive employment rights legislation covering dismissal situations and the endless bureaucracy of TUPE and everything else, simply replace the entire structure with a requirement to pay any employee 'let go' six month's salary. This covers their costs while they get another job.

This is ultimately what happens via the tribunal system anyway, so let's cut to the chase.

Why does this matter?

The employment rights act was a sensible approach to employment legislation in an era when people worked for a single company for all their life and the employer was expected to be a 'patrician'.

Global competition renders that concept obsolete and 'no-win, no-fee' lawyers renders the employment acts a minefield for employers to navigate – too scared to run their businesses efficiently and reluctant to hire. Not good in a market with too few jobs and lots of unemployed.

As an employer I can fire somebody tomorrow regardless of the regulations and for any reason whatsover. It may or may not be 'unfair'. The tribunal system is very unlikely to order reinstatement, because relationships have broken down. Instead they will come up with a sum of money. A lot of lawyers will get rich and the court system unnecessarily burdened.

So it all boils down to money in the end.

Employers need to be able to hire and fire at will for maximum flexibility in the market place. However employees need to be covered while they get another job, retrain, etc.

Employees certainly have a right to a job, but not necessarily with a particular employer or for a particular salary.

By simplifying 'letting go' to a sum of money, you eliminate the costs of a tribunal system and the extensive network of lawyers and consultants living off the bureaucracy. You also free up employers to hire more people as required, and we need that in a market with too few private sector jobs.

 

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