Vince Cable unveiled a shake-up of employment laws on Wednesday which will make it easier to hire and fire workers.
The changes, described as the “ most radical reform package for decades” will make workers wait longer before claiming for unfair dismissal or discrimination, make redundancy consultation periods shorter, and put contentious claims to Acas before they go to an employment tribunal.
A Business Department spokesman said: “"We need to make the system simpler for employers and employees. This package will make it easier for businesses when taking on, managing and letting go their staff, while also being fair to workers."
But TUC head Brendan Barber condemned the move, saying reduced employment rights “will not save or create a single job”.
“It’s not employment law that is holding firms back, it’s the tough economic climate and the problems many companies are having getting the banks to lend to them that’s to blame. Research from the OECD shows that there is no link between regulation and economic output – German employees have much more protection at work and their economy is the strongest in Europe.“
And shadow business secretary Chuka Umunna warned “Instead of seeking to make it easier to fire people the government should be looking to make it easier to hire people”.
The government expects the changes will save around £10m and could boost employers by four times as much.
Speaking this morning Cable denied the government is "trying to create an environment of hiring and firing and insecurity"
"Things are going in parallel. We are trying to reduce the bureaucracy around tribunals and the current process of dealing with disciplinary cases. That must happen, particularly for small companies. At the same time we want to strengthen the position of workers and the labour force", the business secretary told BBC News.
And he said the government was still "calling for evidence" on more contentious issues like changing the notice period for redundancies.
"We've not got any preconceived view about it, and I've a 50/50 view for and against, and we just want to get the evidence in and make a scientific judgement."