November 10, 2011 6:27 pm

Ministers look to bring in ‘protected conversations’

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Ministers are to consult on introducing “protected conversations” that would allow employers to discuss issues such as retirement plans and work performance with employees without fear of being referred to an employment tribunal, David Cameron confirmed on Thursday.

The prime minister hopes that the move, first reported in the Financial Times, will give more companies the confidence to create jobs.

“We want businesses to create jobs, but if employers are so concerned about the prospect, for instance, of being taken to tribunal that they don’t feel they can have frank conversations with their employees many companies just won’t feel able to create those jobs in the first place,” Mr Cameron said.

“So we will be consulting on the introduction of protected conversations; so a boss and an employee can feel able to sit down together and have a frank conversation – at either’s request.”

The move will please the CBI employers’ organisation, which called for protected conversations in the wake of the default retirement age being removed last April. That made it hard for companies to carry out workforce planning without knowing when staff were thinking of retiring, it complained.

John Cridland, CBI director-general, said: “Employment laws should set a necessary minimum standard in the workplace, but they can get in the way of open and frank communication between employees and employers.

“I’m delighted the government is looking at protected conversations. In countries like France, these enable employers to discuss issues openly with staff without fear of a tribunal.”

The move comes amid fierce debate within the coalition about how far to go in loosening employment regulations, especially for small companies, as part of its growth strategy due to be unveiled in George Osborne’s November 29 autumn statement.

Mr Cameron has blocked a proposal to allow employers to “fire at will” those staff members they deem to be underperforming in exchange for compensation.

The proposal was made by Adrian Beecroft, a Tory donor and venture capitalist, in a report for Steve Hilton, the prime minister’s chief policy adviser. Mr Cameron’s allies say no more than “one or two” of the unpublished Beecroft ideas are likely to see the light of day.

Other moves being considered by the coalition include exempting companies with fewer than 10 staff from some existing employment regulation, cutting the 90-day consultation period for making more than 100 people redundant, and simplifying compromise agreements – used by companies wanting to make staff redundancies.

Mr Cameron made his announcement in a speech at a business conference in London, at which he urged small companies to get out of their “comfort zone” and export goods and services abroad.

He confirmed that £95m would be made available from the regional growth fund for companies that cannot access commercial funding, to be administered by RBS and HSBC. The government expects it to unlock a further £500m of investment.

Mr Cameron said that from next April, a “one-click registration” would be launched, so that businesses could get online, register their business at Companies House, sign up for VAT registration corporation tax and self-assessment all in one place.

He said the red tape challenge would be expanded so entrepreneurs and investors could tell the government where regulations get in the way of innovation.

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