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New employment measures needed – CBI

New employment measures needed – CBI

Category: Economy

Updated: 06/07/2009
First Published: 06/07/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

An organisation representing some 240,000 UK businesses has proposed radical new employment measures that would offer an alternative to redundancy.

The CBI says it believes a package of labour market investments and reform could help to prevent further large scale job losses.

Central to the organisation's proposal is the call for the implementation of an Alternative to Redundancy Scheme (ATR), which the CBI thinks should be introduced as soon as possible.

The scheme would still see employees of struggling businesses leaving their employer, but they would be paid twice the existing Jobseeker's Allowance, with the firm and the Government sharing the cost.

During the six month ATR period the employer would be free to look for new work, while the scheme would also allow the employer to take the worker back after the ATR period expires or if the business starts to make a recovery.

If demand failed to pick up, then the ex-employee would then be entitled to a full redundancy package.

"The worst of the recession may be over, but businesses still face a long convalescence and the dole queues will continue to grow," said CBI director general, John Cridland.

"The alternative to redundancy scheme could save jobs by giving businesses more leeway as the economy recovers.

As part of its proposal, the CBI has also asked that the Government: to review the length of consultation for redundancies; to defer the planned increase in employer National Insurance contributions that is set for 2011; to address the rising unemployment in young people; and to ensure that the need for science, technology, engineering and maths (STEM) skills in the next decade can be catered for.

Andreas J. Goss, chief executive of Siemens plc, which worked with the CBI on the report, commented: "To compete successfully in a global market the UK needs a highly motivated, adaptable and skilled workforce.

"Government can help by ensuring a good standard of highly literate and numerate workers coming through an education system where there has been investment in STEM subjects."

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