Institute of Directors

The Institute of Directors (IoD) has launched a scathing attack on the Government's call for evidence about the reforms they propose to make to employment regulations.

In particular they did not agree with the way Vince Cable appears to have already stated his position on various aspects, which they believe undermines the whole purpose of a consultation.

Cable has referred to the proposal for no-fault dismissal as "bonkers" and "nonsense". The IoD, however, feel that these kinds of opinions should be formed after the consultation if it is to have any effect. "We are astonished that [Mr. Cable] seems to have already dismissed the idea in the middle of a consultation, and it calls into question the purpose and value of consulting."

Other business groups are in agreement with Cable's opinion and think that such a scheme would jeopardise the improvements made elsewhere between employers and their employees, for example in relation to flexible working. The EEF, the manufacturers' organisation, said about no fault dismissals, that "the benefits would be limited and make little or no difference to recruitment plans". They have,however, made other suggestions that they feel will allow employers enhanced flexibility in recruitment. Given the economic climate, there have been a large number of redundancies made in recent times. Currently, there is a requirement to consult with affected employees ninety days before the proposed action. The EEF have suggested that this be reduced to just thirty.

In addition to the fact that the IoD feel Cable should not yet have come to any decisions, they say that the whole process of reform is taking far too long. "We are concerned that the Government is increasingly using a two-stage approach of issuing a 'call for evidence' followed by the more customary consultation document. It means the process of reforming the law takes even longer than before." Some would argue that the economy needs changes to help it now, not later. There needs to be a more flexible approach therefore, that allows for some agility and for meaningful changes to be made when they are able to make the biggest impact.

The IoD are in agreement with the idea of no-fault dismissal, originally suggested in the Beecroft report. They would like it to be brought in as soon as possible and for it to apply to all employers regardless of the number of employees they have. Whether or not they will get their way remains to be seen. The consultation continues.

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