DEBATE was raging last night about a radical shake-up of employment law which will hit workers rights.

Business Secretary Vince Cable denied the package of proposed measures, which drew praise from business groups but sparked fury from unions, would create an environment of "hiring and firing" and insecurity for workers.

Mr Cable said the Coalition was trying to strike a balance between good employment rights for staff, and creating an environment, for small companies in particular to grow.

The Government believes the reforms will save employers £40m a year. Labour called for measures to make it easier to hire people rather than to fire them.

As part of the consultation process into the reforms Ministers want views on whether firms with 10 or fewer employees should be able to sack staff without risk of a tribunal if they pay compensation.

Plans also include an overhaul of employment tribunals and moves which could see a reduction in the current 90-day consultation period when firms are planning to make more than 100 redundancies.

Mr Cable confirmed plans to increase the qualification period for making a claim for unfair dismissal from one to two years of employment from next April, and a consultation on "protected conversations" to allow employers to discuss sensitive issues such as retirement or poor performance without it being used at a subsequent tribunal claim.

The reforms would see all claims go to the conciliation service Acas before reaching a tribunal; options for a "rapid resolution scheme" to offer cheaper, quicker decisions on more straightforward claims, and a regional pilot scheme for smaller firms to use mediation.

"Many employers still feel that employment law is a barrier to growing their business," said Mr Cable in a speech to the Engineering Employers Federation.

"Were knocking down that barrier today - getting the state out of the way, making it easier for businesses to take on staff and improving the process for when staff have to be let go.

"But let me be clear, we are not re-balancing employment law simply in the direction of employers. Our proposals are not - emphatically not - an attempt to give businesses an easy ride at the expense of their staff. Nor have we made a cynical choice to favour flexibility over fairness."

Unites general secretary Len McCluskey said the proposals represented .

"a charter for rogue employers and bullies."

Brendan Barber, the TUC general secretary, said: "Reducing protection for people at work will not save or create a single job. Its not employment laws holding firms back, its the tough economic climate and the problems many companies are having getting the banks to lend to them thats to blame."

Dr Adam Marshall, Director of Policy at the British Chambers of Commerce, welcomed the plans for removing the uncertainty over employment regulations that act as "barriers to confidence, growth and job creation."

James Wilders, an employment partner from North-East law firm Dickinson Dees was interested to see how the proposals over protected conversations would work.

"Often employers are inhibited from speaking openly to staff members about issues such as retirement and performance for fear of the conversation being misconstrued or of undermining any subsequent procedure. This proposal will provide employers will an opportunity to have an honest and frank discussion with an employee without it being held against him at a later date.

"However, it will be interesting to see how the Government proposes to put this into practice. So often the devil is in the detail. The idea of protected conversations is novel and refreshing, but whether it will work or not depends on how it will be implemented."