Does weak employment law help economic growth?


A week ago, because the coalition was starting to talk about weakening employment laws ‘to help kickstart the economy’, I reblogged my analysis of the Beecroft report and its author’s vested interest in the measures he was proposing.

Late last week, the papers carried reports of Business Secretary Vince Cable’s plan to slash the maximum award for unfair dismissal from its current level of £72,000 to whichever is the lower of the national median wage (currently around £25k) or the employee’s annual salary. That means someone on a salary of £40,000 a year receiving a maximum of around £25k, and someone on £15k only receiving £15k – for unfair dismissal. If a tribunal rules that an employee wasn’t unfairly dismissed, that person gets nothing – which means that while decent, fair employers have little to fear under the current system, unfair, ‘shark’ employers stand to gain massively from being able…

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