THE BLOG
23/05/2012 11:50 BST | Updated 22/07/2012 06:12 BST

Employment Law - Is it Time to Think the Unthinkable?

Is it time to think the unthinkable about the way we employ people in Britain? The question is prompted by the leaking of Adrian Beecroft's controversial report to the government, which recommends sweeping changes to aspects of UK employment law.

Is it time to think the unthinkable about the way we employ people in Britain? The question is prompted by the leaking of Adrian Beecroft's controversial report to the government, which recommends sweeping changes to aspects of UK employment law. The proposals have been fiercely criticised, not least by Vince Cable, who argues that following the path to prosperity does not require employees to be 'scared out of their wits'. But should we be scared at all by what Beecroft has to say?

He proposes reducing by two-thirds the minimum period over which employers must conduct 'collective consultations' about large scale redundancies, which would achieve large savings in wage costs. He also favours restricting the protection given to employees whose employment terms are preserved by TUPE (for instance, when a business changes hands, or a service is in-sourced or outsourced) to twelve months. And, most controversially of all, he argues for 'compensated no-fault' dismissals, so that an employer can dispose of an unwanted employee who is not redundant by paying out the notice period and a sum equal to a statutory redundancy payment - which may be very modest.

Beecroft admits that his plans would make it easier and cheaper for employers to sack people just because they do not like them. Legal protection from discrimination would not be affected by the proposals, which may be due more to the fact that we are bound to comply with the European equal treatment rules than because Beecroft regards the rules as wholly desirable. There is little doubt that many employers, especially smaller businesses, would welcome the changes. But this may be due more to the mythology that surrounds employment rights than any well-founded belief that Beecroft's changes would help boost the economy.

Some of Beecroft's plans seem better targeted than others. The collective consultation rules are rather bureaucratic - although genuine consultation processes can help preserve jobs in some cases - and TUPE has complicated life for employers ever since it was introduced 30 years ago. Implementing the recommendations in these areas would save businesses time and money, and it may be that the price paid for this (by the employees who lose out) could be justified - though it is hard to see any trade unions agreeing.

It is worth bearing in mind that unfair dismissal was introduced - by a Conservative government, as it happens - to help reduce injustice in the workplace, and the hidden costs that can arise from such injustice. And the regime has also had the effect, I would argue, of improving management. Partly, this has been done through an emphasis on following sensible procedures, partly by focusing managers' minds on the nature of the workplace problems they need to address.

Critics of Beecroft may ask whether inflicting a perceived injustice can ever be good for a business. But another question is whether 'compensated no fault dismissals' would incentivise lazy and incompetent recruitment and management. This is, surely, a risk.

Employment law in this country has a variety of flaws which provoke the hostility that many employers feel towards the legal regime. But tackling these flaws requires not just tinkering with the legal rules, but also changing the culture of dispute resolution in the employment field. The regime was supposed, when it was introduced, to be informal, accessible, speedy and non-legalistic. Today, it is often none of those things.

Part of the fault lies with legislators, and the increasing complexity of the legal rules. Tribunal cases should not be similar to High Court litigation, but the resemblance is increasing. One reason for this is the potentially large sums at stake. There may be a case for cutting the maximum compensation that can be awarded, perhaps to roughly the real terms levels that applied before the massive increases ushered in by the last government.

But it is a myth that dismissing people is bound to be impossibly complex and expensive. Sometimes hard cases arise, but they are a minority.. So how has the mythology been created? Employment lawyers - I am one myself - are certainly not faultless, because all too often advice given is negative or excessively cautious. HR professionals, especially in large organisations, sometimes fall into the same trap. ''No win, no fee' consultants are often a menace, because they hype up the risks that employers face in dealing with their staff.

Managers themselves, however, cannot escape all of the blame. Dealing with problems as and when they arise, rather than leaving them to fester and get worse is obvious and sensible. Yet many employment disputes become tricky largely because of a manager's failure to recruit sensibly, think ahead, or grasp a nettle quickly enough. Then panic sets in, resulting in over-reaction. It happens time and time again. Better employment laws are desirable, but the Beecroft report might have found a little more favour had it recognised that better and more consistent management is a must.