Cable wrote off the Beecroft report, but now he’s consulting to introduce measures like fire-at-will for micro-businesses
Vince Cable likes to proclaim that he acts as a check on his coalition partners’ “nasty” tendencies when it comes to all of our rights at work, but he is pushing ahead with the majority of the recommendations in the flawed Beecroft report, produced by No 10 adviser Adrian Beecroft.
The business secretary has already been consulting to introduce fire-at-will for micro-businesses and he’s bringing forward a number of measures from the controversial report too, through the enterprise and regulatory reform bill currently going through parliament.
When Beecroft was summoned to explain himself in parliament, he admitted there was little evidence to support his proposals. That is why parts of his report have been criticised by business groups, including the Federation of Small Businesses, Institute of Chartered Accountants and the manufacturers’ organisation, the EEF. But what do these changes mean in a practical sense for all of us in the workplace?
While protection against dismissal on grounds of discrimination begins for employees on day one, unfair dismissal exists to protect people at work against all other forms of unfair treatment and against being fired for any reason other than performance, redundancy or conduct. The government started its attack on employee rights by implementing legislation earlier this year which doubled the qualifying period needed to claim unfair dismissal from one to two years.
The attack on our rights continues in this bill by giving the business secretary powers to cap compensation awards when someone has been unfairly dismissed to a maximum of a year’s pay (regardless of how much they have lost). The Law Society has said “this cap will prevent a substantial number of claimants who have been unfairly dismissed from recovering their full losses”. He is expected to announce that he plans to use these powers immediately, drastically weakening the deterrent effect of the unfair dismissal regime.
Cable has also talked up his new plans for compromise agreements. At the moment, these are a useful tool which allow employees and employers who are in a dispute to reach an agreement. However, he is now trying to sell us a new version, which he calls “settlement agreements”. What he doesn’t tell us is that these are different and dangerous. His vision seems to allow for unscrupulous employers to offer employees a pay off, simply because they don’t like them; if this is refused, the employee would simply be expected to go back to work, leaving a cloud over the relationship. What’s more, if this resulted in a dispute at an employment tribunal, the employee wouldn’t be able to mention that the employer had done this. Frank conversations between employers and employees take place in workplaces across the country every day, but there is potential here of a no-fault dismissal bribe.
And in situations where things do go drastically wrong, many employees will not be able to afford the costs of the new tribunal fees. The reality is that Cable is making it easier for employers to push employees out the door with a poorly compensated “settlement agreement”, while making it more expensive and complicated for staff to get a fair hearing. Even if they are judged to have been unfairly dismissed at a tribunal their compensation would be restricted making it easy for employers to gamble.
These proposals have been rushed together to appease Beecroft’s champions within the Tory-led government. They ignore that there is no evidence that this will boost growth and jobs. They ignore the impact on the millions working in businesses who will have less security and less confidence in the future. And they ignore the fact that we are not going to compete in the global economy based on insecure and low-paid jobs.
We need to reform the economy so that it works for all. We can improve our already flexible labour market. We support compulsory Acas pre-conciliation, for example. And there is much support needed for businesses – like unlocking finance – to enable them to start and grow, but that doesn’t mean throwing away the rights at work for all. The UK already has the third most deregulated labour market in the world according to the OECD, but is just one of two G20 countries in recession. The blame for this lies squarely with this government’s failed economic policy – we are in a recession made in Downing Street, but this has been caused by ministers’ failed policies, not protections at work.
Cable was right when he said in February that the government doesn’t have a “compelling vision” and it’s true today. But her was wrong last weekend when he said Beecroft’s proposals were dead. They’re not. They’re alive and well as he implements Beecroft by the back door, and employees should be worried.
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