Vince Cable has announced more power to businesses to sack underperforming employees but the details are not clear. If he means the use of settlement agreements then this is nothing new, as we currently have compromise agreements in place, which provide for under-performing employees and these will in the future be known as settlement agreements.

“There has been talk of such agreements not requiring legal advice to make them binding but any employee who is unsure on what he is signing is bound to take legal advice, which could simply mean no change to the present system of negotiating the terms on the basis of each parties respective bargaining power and the threat of dismissal. “It has also been confirmed that compensation for unfair dismissal will be reduced. This is not a new proposal but we do not know at what level this will be capped at. Will it be pre-1998 figure of £12,000 or the post-1998 figure of £50,000? Neither, in my view, had an impact on the number of claims being presented to a tribunal. “We do not appear to be any further than we currently are and the status quo has largely remained the same.”

Marc Jones, head of Employment and HR at Turbervilles Solicitors, who questions whether these reforms have actually changed anything: “I have seen the provisional announcement that plans for “no fault dismissals” have been scrapped, which is clearly sensible as in my view this was ill-thought out, as putting a bar on the right to claim unfair dismissal was clearly open to abuse by unscrupulous and/or clever employers and lawyers. “The proposal failed to consider that negative impact on businesses in that employees were more likely to job hop to a company that provided job security and the right not to be unfairly dismissed after two years of employment, and further failed to take account that some employees would be seeking high salaries, sign-on bonuses and contractual severance payments to work for an exempt small business.