As we have previously reported, in 2011 the Prime Minister asked Conservative donor and venture capitalist, Adrian Beecroft, to review existing employment legislation and propose changes. The Beecroft Report was officially published this week. This was earlier than planned, following the leak to the media of a draft report, which interestingly contained some points which were not present in the final published version.
One of the most controversial proposals Beecroft makes is to allow employers to dismiss staff without cause and without following any procedure, provided that they pay compensation. The level of compensation would be the equivalent of statutory redundancy pay. Beecroft says in his report that he realises that some employers might use this as a way of getting rid of people because they don’t like them, but that this risk is a price worth paying. Vince Cable, the Business Secretary, has condemned this suggestion as being “the wrong approach” to employment legislation which would “scare the wits” out of employees. While the suggestion has been welcomed by many Conservative MPs who believe it would help get the economy moving and create jobs, it has not been accepted by the Prime Minister.
However, Vince Cable’s department is still considering introducing a similar scheme for employers of less than 10 employees. They have called for evidence from businesses and other interested parties to see whether this proposal would be welcomed.
Other proposed reforms in the Beecroft Report include:
- An end to the mandatory 90-day consultation period when a company is considering large scale redundancy programmes where it is contemplated losing more than 100 employees. Instead it suggests a standard 30-day period and an emergency five-day period if a firm is in severe distress where there are collective redundancies proposed
- A cap on compensation for employees who make successful discriminatory dismissal claims
- Reform of the Transfer of Undertakings Regulations so as to limit the protection of workers when their employment is transferred to a new employer
- Scrapping the provisions in the Equality Act 2010 which can make employers liable for claims from employees for third-party harassment, such as customers making racially abusive comments to staff in a restaurant. At present, liability will only occur where harassment has occurred on more than one occasion and when the employer has failed to take reasonable steps to prevent the harassment
- Shifting the responsibility for checking foreign workers’ eligibility to work in the UK from employers to either the Border Agency or the Home Office.
This is in addition to the points mentioned in the Queen’s Speech about extending flexible working and shared parental leave, and also the separate proposed reforms to dispute resolution and the Employment Tribunal system.
It will be very interesting to see how many of the Beecroft proposals the Government will seek to introduce as part of their ongoing review of employment law. It is notable that several of the proposals may fall foul of European law, so if they are adopted they are likely to face challenges in the European courts.
We will monitor the various reforms which are being proposed and will of course keep you updated in future ebulletins.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team on 01243 836840 or [email protected].