How odd that the Government should ask a venture capitalist to advise on employment law and how intemperate and ill advised a response Adrian Beecroft appears to have offered in his report, a draft of which is leaked in the Daily Telegraph today.
I know nothing of Mr Beecroft’s background but I wonder how much he really understands the daily practices of people managers. It seems he wants to get rid of the right to bring a claim for unfair dismissal, introducing instead a basic no fault dismissal law in which individuals dismissed through lack of performance would receive the equivalent of a redundancy payment.
The right to bring a claim for unfair dismissal was introduced following the 1968 Donovan report on trade unions and employers associations and was an element of the 1971 Industrial Relations Act introduced by the then Conservative Government under Sir Edward Heath.
Something simply had to be done to address the widespread capricious use of ‘the sack’ which was an irritant giving rise to many unofficial strikes and stoppages of work. The right to complain of unfair dismissal is underwritten in conventions of the International Labour Office.
As matters stand, capability and performance are among the fair reasons for dismissal. An employer wishing to dismiss an employee for incompetence or just not working hard enough may do so. The only restraint is that they have to follow a fair procedure, giving adequate warnings and allowing the individual to have a hearing, etc.
So unless he is suggesting an end to these procedural rules too, there might be little practical change from Beecroft’s proposals that would represent any real ‘gain’ for the employer who wishes to fire someone. Denial of a fair hearing would probably amount to wrongful dismissal, a different concept, and could give rise to legal claims in the county court.
Compensating individuals (perhaps after many years service) by giving them basic state redundancy pay – nowadays much reduced in value – would be sure to provoke an indignant response among employees. Beecroft’s idea would seem to be designed to cut costs but it would probably lay the basis for endless negotiations with legal representatives and unions on acceptable pay off levels that would probably end up using existing unfair dismissal compensation as a benchmark.
Beecroft’s changes might invite employers with ‘a thing’ about declining performance and age to revert to the now outlawed default retirement age. The other side to the coin, however, would be that anyone who wished to challenge a dismissal would look to whether or not they could bring a claim of discriminatory dismissal on grounds of age, gender, sexual orientation or whatever.
One consequence of this would be that cases would be hard fought, with the bar for costs and compensation levels at the far higher ‘no limits’ levels that apply in discrimination claims. Many would be settled out of court but the stakes might well be higher than they are at present where the issues are simpler and less inflammatory than an accusation of discrimination.
So long as there are rights of one sort or another to bring complaints of unfairness, it is natural that people will look hard to see if their case fits. Rather than delving into histories of bickering and poor relationships (forgotten skeletons in dark cupboards) it would be better to leave well alone in my view.
Beecroft’s view of managers exercising their responsibilities for managing performance is worrying. (I wonder what his evidence is that large numbers of people are backsliding and idling away the hours in the way he implies?)
If his picture resembles the truth, it is surely important to introduce more responsibility and professionalism among managers to manage performance, talk to their employees and ensure that round pegs are in round holes.
Such elementary approaches are surely preferable to stripping away the basic rights of employees to a fair hearing and, at the end of a very long road, a statutory right to complain of unfairness.
But were Beecroft’s ideas to gain acceptance, look out for a spike of complaints of age discrimination. In the US, where there are no rights to complain of unfair dismissal, age discrimination claims are soaring. Is this the future we have to look forward to? I really hope not.
GUEST POST: Chris Ball is Chief Executive of The Age and Employment Network. Prior to joining TAEN he was a freelance journalist, an HR consultant and a national officer of the union MSF (now Unite). He is a Chartered Fellow of the CIPD, holds a doctorate in industrial relations from the London School of Economics and is a member of the government agency, the Central Arbitration Committee.