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Divisions develop in UK coalition over employment law

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The relationship between the Conservatives (Tories) and the Liberal Democrats (Lib Dems) has always been a bit strange. The Lib Dems sold their souls to the Tories in hopes of election reform but that never really worked out the way the Lib Dems had hoped. Were they fools for believing in the Tories? Probably, so there weren't too many tears shed for the Lib Dems.

The next election is theoretically not until 2015, but more cracks are developing in the odd partnership. A big money Tory donor recently has been pushing for employment reform in the UK, including "no fault dismissal" for employees. For those unfamiliar with UK and European employment law, terminating a contract for an employee tends to be more complicated and time consuming and ultimately more expensive than what we know in the US.

As someone who is familiar with both sides of this issue, I still have mixed feelings on this. Though I ultimately favor the European model - it's more fair for employees - there are certain aspects of the US model that remain superior. There is no question that employees change jobs more often these days compared to a few decades ago. Changing jobs every few years has become a fact of life whether we like it or not.

Where the UK/European model is superior is that it forces companies to find solutions (change managers, change positions, etc) or face time consuming, expensive terminations. For employees, job terminations are painful but employees can often receive enough money (tax free in France) to carry them through the long transition period.

Where the US model is superior is that finding employment tends to be a much faster process. It's extremely cruel to see how quickly and easily companies dump employees in the US. On the other hand, compared to the UK and Europe, finding new employment is much easier and faster.

Europe is slow to hire and also slow to fire. People who lose their jobs do have more money in their pocket and unemployment is much more than the US but wow, the process is painfully slow for finding work. What may take 3-6 months in the US could easily be 6-12 months in Europe. For many reasons, this is not a good place to be for any job seeker.

The Tory-proposed plan to "reform" employment law deserves criticism, especially now that everyone is mired in a soft economy when everything is more difficult. At the same time, finding a new model that makes it easier for employees to find work faster shouldn't be ignored. What also has to be a part of any reform for employees must also include reform for the very comfortable exit plans for the financial elite and executives.

Ultimately what is needed though is improved loyalty by businesses and an end to the harshness that dominates business culture today. That by itself if a tall order that looks out of reach any time soon. In that regard, the Lib Dems are right to block attempts by rich Tory donors to change the rules for everyone other than the pampered class at the top.

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