Employers from major UK businesses have met with prime minister David Cameron to discuss plans to create thousands of new jobs in the private sector.
Bosses from Microsoft, Virgin, McDonalds, Jaguar Land Rover and all four big supermarkets are among the 19 executives attending the meeting to discuss what further action the government can take to support job growth.
The prime minister said: “By developing the right skills and jobs I am determined that the many, not the few, will share in the country’s prosperity.”
As well as discussing changes to employment law, the senior executives are promising to create thousands of jobs and apprenticeships in an attempt to generate some confidence in the economy.
Supermarket chain Morrisons says it will create 6,000 new jobs in 2011, with Tesco promising 9,000 and Sainsbury’s 6,500. Asda has pledged to create 15,000 retail apprenticeships. John Lewis and Microsoft have promised 4,000 new jobs each and gas company Centrica 2,600.
Employers are expecting to receive additional government help this week in the form of a new “employers’ charter” which will give firms more powers to sack under-performing staff.
Potential changes to employment law include allowing companies to sack workers during the first two years of employment without staff being able to claim unfair dismissal. Under the current rules, workers can bring such a claim after one year.
Fees for bringing employment tribunal claims could also now be introduced to deter opportunistic, false or malicious tribunal allegations.
The government is also launching a review that is designed to support small firms by excluding them from some employment laws to bolster this area of the economy, it has been reported. These exclusions could include reducing the period that small firms have to pay workers statutory sick pay.
The government has targeted its support at smaller companies because they are viewed as the key to securing the economic recovery.
In the past, small and medium-sized firms have complained that they are undermined by gold plated pro-employee rules introduced over the past decade.
John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD), welcomed the jobs summit as evidence of the government’s determination to drive growth, but suggested that the mooted employment law changes would have only a marginal effect on the potential for job creation and might affect employee engagement.
Quoted in People Management, Mr Philpott said: “The fall in UK private-sector employment during the recession was purely the consequence of inadequate demand resulting from the global financial crisis rather than because of some underlying problem in the functioning of the labour market,” said Philpott.
“The critical determinant of private-sector employment growth in 2011 will in turn be the extent to which net exports and investment offset slower consumer spending and the planned cuts in public spending and tax hikes.
“In this context it would be particularly inadvisable for the government to introduce a so-called ‘employers’ charter’ enabling employers to dismiss workers within two years of being hired rather than one year at present. Such a move would do nothing for jobs in the short-run against a backdrop of weak economic growth and would at best have only a limited impact on the economy’s underlying job creation potential.
“Evidence on the effects of employment protection legislation is equivocal but on balance suggests that while less protection encourages increased hiring during economic recoveries it also results in increased firing during downturns.
“The overall effect is thus simply to make employment less stable over the economic cycle. It is arguable that had a policy akin to the ‘employers’ charter’ been in place during the recent recession there would have been more redundancies in a manner akin to what occurred in the 1990s recession.”