Workers face a drastic cut in how much compensation they can win in unfair dismissal cases, but “fire at will” reforms are being officially abandoned, Business Secretary Vince Cable has confirmed.
Company bosses will, however, be given stronger legal protections to get rid of under-performing staff under a shake-up of employment laws.
Mr Cable said “no-fault dismissal” proposals made in the David Cameron-commissioned Beecroft Report are being dropped after a lack of support for the idea among the business community.
Meanwhile, Mr Cable has dismissed criticism over text messages he exchanged with opposition leader Ed Miliband.
Former Lib Dem leader Sir Menzies Campbell warned him that such communication could undermine the coalition by aggravating already disgruntled Tory backbenchers.
But Mr Cable said: “In politics you have to have a reasonably adult way of dealing with people. I very, very occasionally talk to Ed Miliband and sometimes his people, and indeed people across the spectrum.”
When asked if he was annoyed that the Labour leader had made their communication public, he replied: “It doesn’t matter. There’s nothing to be embarrassed about for him or for me. I talk to people across the political spectrum.”
Sir Menzies said: “The success of this coalition depends upon everyone who participates in it being a full subscriber, and I don’t think it helps a partnership to suggest that you may already be looking for another partner.”