Iain Birrell analyses the report behind the Tory employment law reforms
Beecroft never did go away. The report by the Tory venture capitalist, which business secretary Vince Cable was forced to publish on 21 May after it appeared on the Daily Telegraph website, is clearly behind every employment law reform we have seen or which the government is promising us.
It’s not surprising that BIS has been slow to release it. Originally described by Whitehall sources as “flimsy”, it is a grubby and pernicious document, completely devoid of any evidence for the statements it makes and the recommendations it exhorts the government to implement.
Even though the version published by the Telegraph, dated 12 October 2011, was hastily re-written by David Cameron and BIS officials, with the final version dated 24 October, it is unlikely to have made it into the public domain at all if the original hadn’t been “leaked”. It is another governmental shambles.
Lib Dem business and enterprise minister Mark Prisk stressed that the 12 October version had been revised. Yet while it no longer contains some particularly unpalatable recommendations (even for this government), it is as breathtakingly misanthropic as the original.
It’s telling that Beecroft is so keen to snatch rights away that he cannot even get the names of the legislation correct. He refers to the Employment Rights Act 1976 and the Equalities Act 2010; errors not corrected in the redraft.
The shocking “rogue chimney sweep” recommendation to abolish the licensing system for the employment of children, has gone. Beecroft never did explain how a return to exploiting child labour could create economic growth.
Gone too are the sections on flexible working and parental leave, which called on the government to delay the implementation of flexible parental leave and repeal the Flexible Working Regulations 2002 so that employers are not “forced” to adopt flexible working.
The report gives an indication of where the recent calls for evidence on collective redundancies and TUPE Regulations may take us.
Thirty days consultation for collective redundancies regardless of the number of employees being made redundant and just five days if the business is going through the insolvency process because “speed is of the essence if the business is to be saved” both miss the whole point. The consultation period isn’t about delaying the inevitable but about workers and employers jointly seeking to find alternatives to redundancy and if possible save the business.
Where it isn’t possible to save the jobs the minimum periods allow local and national government agencies to work with the affected employees on other job possibilities and issues around re-training, and employment. You would have thought it’s an approach that the government of a country in double dip recession would want to encourage as opposed to getting workers out of the door as fast as possible.
Beecroft wants the service provider provisions of the UK law “repealed and replaced by a better way of identifying whether or not a transfer is subject to TUPE”.
Yet inclusion of the Service Provision Changes in the 2006 TUPE Regulations has provided far greater certainty as well as fair competition between those bidding for contracts. In the vast majority of cases bids are now submitted on the basis that TUPE applies - rather than bidders taking a chance that it won’t, with all the resulting uncertainty for both businesses and employees that situation created.
Still in the Beecroft report are no-fault dismissals. Vince Cable and Nick Clegg are being allowed to run with their opposition to this, for now, with speculation that Cameron will drop the proposal to avoid splitting the coalition. But let’s not forget that the last time the Lib Dem leadership claimed to have blocked the plan Cable was then persuaded to launch the call for evidence on no-fault dismissals for micro-businesses.
Beecroft recommends compensation for an employee dismissed under a no-fault dismissal regime should be a tax-free payment related to the employee’s salary, age and years of service, capped at £12,000.
This he says “might seem generous for dismissal for poor performance” but would “reward loyalty” and be more acceptable to employees and unions. And yet he suggests that this lower level of compensation would mean that employers would always choose compensated no fault dismissals over redundancy.
It glosses over the fact that there is now no entitlement to pursue unfair dismissal claims until two years have been worked and so such a structure would expose (on the government’s own estimate in last year’s Resolving Workplace Disputes consultation) at least 2.9 million extra workers to a fire-at-will culture.
It isn’t clear how a regime that fosters sudden death sackings, which bypasses redundancy payments and which encourages employer disloyalty to staff will nevertheless reward employee loyalty as Beecroft claims. Surely even he can't really believe such flimsy and self-serving sophistry.