The government is pondering whether to adjust employment laws to discourage frivolous tribunal claims and make it easier for small to medium-sized enterprises (SMEs) to generate new jobs.

According to a report in the Daily Telegraph, the Conservative-Liberal Democrat coalition is poised to launch a review into the effect current legislation has on start-ups, in an effort to boost private sector activity.

"The thrust of the initiative is that to persuade companies to hire people we need to make it easier to fire those workers who aren't up to the job, so there is less risk in taking on new people," an anonymous Whitehall source told the newspaper.

Prime minister David Cameron is due to meet with some of Britain's largest companies today (January 11th 2010) and emphasised the government's "pro-business, pro-growth, pro-jobs" credentials.

Last week, the British Chambers of Commerce claimed that many SMEs were opting to settle employment disputes out of court, as it was more cost-effective than going to a tribunal.

Posted by Hayley Edwards