Vocal opposition likely to scupper most of Beecroft's ideas

Adam Hooker
Wednesday, May 30, 2012

The report on employment law produced by venture capitalist Adrian Beecroft for the government last week has polarised opinion and, due to the ensuing furore, its proposals are unlikely to be adopted wholesale any time soon. However, the government may attempt to implement some of the proposals independently, with many people suggesting that 'compensated no-fault dismissal' is a likely option.

However, while employers will welcome any proposal that makes their lives easier, according to BPIF chief executive Kathy Woodward, it wasn’t exactly high on the agenda.

"This is not something we have heard our employers asking us to lobby for, so I don’t have a representative position from BPIF member firms, although we will be seeking to canvas their opinions," she says.

Beecroft’s proposal would make it easier for an employer to get rid of a member of staff that it did not think was performing well enough, with a compensatory payment, in what appears to be akin to the ‘mutual consent’ often cited for the departure of football managers.

However, Woodward is not convinced that the introduction of a no-fault clause is necessary, and warns that it could actually cause more harm than good. "Employee relations are at the most progressive level I have known, with a genuine coming-together of management and employees to steer a path to sustainability in what are times of major challenge for the industry," she explains.

"Managers are becoming far more competent at managing non-performance and removing underperforming individuals from their businesses fairly and the focus of their activity is about working with their employees to drive through the innovation and change at a local company level. It would be a great shame if this momentum and spirit of cooperation is unbalanced by the introduction of a fear culture."

Protecting employees
While managing directors could reasonably be expected to welcome the ability to remove unproductive employees more easily, Westdale Press managing director Alan Padbury actually believes protection of employees is far more important.

"While the current regulation makes it harder to remove people, it doesn’t make it impossible," he says. "I am not well known for my socialist tendencies, but I think it is right to recognise good law – and a law that protects employees from knee-jerk decisions to fire them is probably a good law.

"It is important not to turn this into an excuse for poor interview techniques and lazy human resource management. It is not a mammoth task to remove someone who no longer performs in their role, and a year is plenty of time to find out if you have made a bad choice."

However, not all managing directors are quite as supportive of the current law, and Ink Shop’s Stuart Mason sees the proposals as shifting the balance a little towards the employers.

He says: "An employer is faced with an almost impossible task of removing under-performing employees, yet they have few powers available for a speedy resolve when an employee’s work or time record is in question. 

"The same employee can leave with little or no notice, leaving the employer with another almost impossible task of recovering losses. Yet the same employee would have the company in a tribunal in days if anything other than the onerous procedures were not followed."

Mason has also backed Beecroft’s proposal to allow smaller businesses to opt out of a lot of the rules governing employment, which Mason says are "ridiculous" for SMEs.

"Larger corporations that can afford HR are well-placed," he says. "But much smaller business with, for example, only 20 employees are accountable to exactly the same legislation and procedures. There is a vast number of businesses of this size strangled with constantly changing, demanding and ridiculous employment law."

For Glossop Cartons managing director Jacky Sidebottom, one of the report’s key suggestions is the reduction of consultation periods for redundancy, which would see all consultations run for 30 days.

She said: "The 90 days just gives all concerned far more time to experience stress, anxiety and disappointment. It also burdens a company’s financial liabilities far more, risking further jobs. 30 days is far more compassionate to all."

"Employing staff can be the hardest part of business. They hold all the aces and the small minority can cause business owners stress. Business owners suffer stress too – more than staff – but in the government’s eyes, we don’t matter." 

Of course, widespread and highly vocal opposition to Beecroft’s proposals means the whole idea may be swiftly dropped like the political hot potato it is – Prime Minister David Cameron has already withdrawn support – and even if some of it does make it through Parliament, as Larkbeare managing director Neil Oakley says, "it will be so watered down it will have little effect."



BEECROFT'S PROPOSALS

 

  • Make it easier to dismiss underperforming members of staff, reducing the risk of tribunals and removing a culture of inefficiency within UK companies, and in particular public bodies
  • ’Compensated no-fault’ dismissal will allow firms to remove a staff member for a one-off payment
  • Employees to be given a chance to argue their case – but this would be a suggestion, not a demand
  • Small businesses cannot afford the burden that falls with maintaining all of the government’s current employment laws, so businesses with 10 staff or fewer should be allowed to opt-out of a number of them, although not all
  • The employment tribunal should be severely simplified
  • Flexible parental leave proposals, not yet introduced, to be scrapped
  • Pension auto-enrolment should not apply to companies under five staff
  • A year after employees are brought across in a TUPE deal, their terms should be brought in-line with the company’s existing terms

 


READER REACTION

What do you make of terms outlined in the Beecroft report?

Mark Snee
Managing director, Technoprint
"On the one hand, it’s important that employees are not at risk of being unfairly, unreasonably or summarily dismissed for weak reasons. On the other, the tribunal and legal system has become a serious problem for employers, which may well be one of the reasons that the UK is now an increasingly unattractive place to do business. Ultimately, it would be better to sweep most of the regulations away and see what happens. I think what everyone wants is a system that is understandable, predictable and fair."

Simon Biltcliffe
Managing director, Webmart
"I think that common sense is a good rule of thumb in all things to do with employment. Some of the employment laws in place are clearly unfair and do need correcting in line with the new economic reality we find ourselves in. However, at the same time, we must protect employees from abuse. It comes down to a question of getting the right balance. Flexibility will be key if both employees and employers are to be prevented from finding themselves left behind by the current marketplace."

Gurdev Singh
Managing director of direct channels, Communisis
"Any legislation that helps cut red tape and costs is welcome. However, we work with our staff and our unions and find that most legislation works well to ensure both parties can find common ground. The key, in my opinion, is a properly functioning HR operation and small businesses may struggle, as perhaps they do not have such resources. ACAS, though, can provide useful advice and services to both employees and businesses. Terminating a contract should be a last resort."

Read Walstead Investments chairman Mark Scanlon's opinion here

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