Venture Capitalist

Last year we had the much talked about Beecroft report on how to change employment law for the better. The main idea in that report was that of “no fault dismissals”. A no fault dismissal would make it easier for employers to dismiss staff without the fear over repercussions in a Tribunal. Instead of going that far, however, the government decided that it preferred a middle ground and the idea of “protected conversations”. The hope was that employers would be more willing to take on staff knowing that they had a way of speaking to them frankly about their performance should they feel the need to, without the risk of such conversations being regaled in Tribunal at a later date. Now there is news that George Osborne is to make further announcements when he releases the new budget in March under the heading of a “go for growth” package. The idea is to limit the legislation that smaller companies have to follow.

In essence, “go for growth” has been likened to something of a watering down of the previous Beecroft report. There has been much discussion about the need to help smaller employers to employ staff. Liam Fox, former Defence Secretary, believes that employers feel it is too expensive to take on new staff. Some of the employment legislation is considered so onerous that it is discouraging for some employers considering taking on new staff. However, whilst some may see the point behind the idea there still exists a need for balancing the needs of employers with those of employees. Why should an employee of a smaller business feel any less protected than one of a multinational company for example?

At present we are unsure about what a watered down version of the Beecroft report might entail. Despite this lack of details, there are many who already do not like the principles behind it. There is a general concern over the widening gap between the bargaining power of employers and employees. The extension of the qualifying period for applications against Unfair Dismissal have been cited as a huge change in itself.

Clearly, the economy has caused the Government to have to consider different methods of stimulating growth and there seems to have been a lot of emphasis on employment legislation. Some people are accordingly of the opinion that any such move in this direction is political, perhaps to gain the vote of businesses rather than one which has the rights of workers at its centre. Arguably, one could say that it will make it easier to get a job if employers feel under less pressure, however, it also makes it easier for you to lose that job. The worry is that the lack of recourse to employers will lead to hiring and firing at will, without good reason. Combined with the extended qualifying period this could be very bad news for employees.

Yes there is a perception that there can be a lot of “red tape” in employment but this is a perception that needs to be tackled in a different way to what is currently being proposed. We will have to wait and see what plans, if any, are released next month concerning the relaxation of employment legislation for smaller employers. Hopefully, any changes will have the rights of employees at their centre just as much as those of employers.

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