In which I am curiously lacking in views on the Beecroft Report

Hello lovely blog readers. Long time no see. How have you been?

Time, laziness and a lack of righteous anger have kept me from you over recent weeks. Happily the news last week was filled with the wonder the is the Beecroft Report on employment law, and so I am able to return to you with something to muse upon/rant about and blogging normality may be resumed.

For those of you not familiar with the tome, the Beecroft Report is a report into UK Employment Law written by one Adrian Beecroft and recommending a set of changes to the law which the report claims respond to the current situation where “employment law and regulation impedes the search for efficiency and competitiveness.” Efficiency and competetiveness are obviously the guiding aims of any right thinking individual, so impeding them is, very clearly, A Bad Thing.

Shall we take a look at some key points in more detail? I think we shall. Shall we number those points? You better believe we will. Before we do that I just want to make one thing painstakingly clear. It is, and always has been, entirely legal for an employer to dismiss an employee because they are bad at their job. The legal term is “dismissal for reason of capability” and it’s allowed. It always has been allowed. No-one, to my knowledge, has ever suggested that it should not be allowed. Remember that point – it’s going to be important later.

1. Unfair Dismissal

The Beecroft Report says: “The ability to dismiss an employee who is not performing is an essential element in managing any business.” With this in mind Beecroft recommends the introduction of “no fault” compensated dismissal, whereby an employer can dismiss a person without giving a reason, if they provide monetary compensation. Now, I don’t know if anyone’s ever mentioned this to you, but it’s already perfectly legal to dismiss a person for being lousy at their job.

If the employee is fine and dandy at their job, I don’t quite understand why an employer would want to pay them to go away, and if they’re terrible at the job, then why would you pay for the privilege of sacking them, when you can sack them for free at the moment.

The change Beecroft is trying to introduce here is create a situation where an employee can be dismissed, given no reason for the dismissal, and have no legal recourse. There’s another thought I’d like you to hold onto…

2. Employment Tribunals

Beecroft lays out his perception of the Employment Tribunal system like this: “Employers in general deeply dislike employment tribunals, a feeling shared by most employees. They are expensive, time consuming and personally stressful.” I’m going to skim over the grossly unevidenced assertion in the opening sentence, assume that I missed the memo where they checked what we all thought about Employment Tribunals, and move onto the specifics in sentence 2.

Employment Tribunals are expensive – to whom? The government is very clear that claimants do not need expensive legal advice to navigate the process. If they did, then presumably legal aid for employment cases would have been retained in the recent Legal Aid Reform Bill. It wasn’t. Submitting an application is free. There’s the cost of travelling to the hearing, and the cost of photocopying submissions and evidence. Compared with most legal processes, from a claimant and respondent’s point of view it’s relatively inexpensive. Having cited the cost of the tribunal process as a problem, Beecroft goes onto recommend introducing fees for claimants. One can only imagine that he’d forgotten how expensive he thought it was when he wrote that bit.

Employment Tribunals are time consuming – well yes, although how time consuming depends on the complexity of the claim. Suing or being sued over any other contractual dispute would also be time-consuming. Strangely, that fact doesn’t appear to lead us to conclude that the wider civil courts are probably a bit of a dodgy idea.

Employment Tribunals are personally stressful – well, potentially. Whether they’re more or less stressful than being fired for no reason and with no legal recourse, is open to debate.

In addition to introducing fees for claimants, Beecroft also supports other BIS plans to attempt to reduce the number of claims that make it as far as tribunal. Do you get the impression that he wants to discourage people from making Employment Tribunal claims? If you do, then that would be a fair impression. But is it needed? If only statistics were available detailing the current workload of the tribunal system. Happily (well happily for nerds like me) they are. You can read them for yourselves, if you are so minded, here.

Between April 2010 and Mar 2011 383400 claimants made an application to the Employment Tribunal. That was a slight fall on the numbers the year before, but still well up on the 266500 claims in 2008-9. Although actually it wasn’t, because to look at things clearly you really need to discount a big hunk of repeat claims that originate from an specific set of problems to do with Working Time Regulations in the airline industry and are resubmitted every quarter. Putting aside that whole hornet’s nest, we see that the claims year on year look something like this:

2008-9 – 242500

2009-10 297600

2010-11 268300

Not such a big variance from 2008-9 to 2010-11 after all. So if claims aren’t significantly rising, why the need to discourage claims? It comes down to a really fundamental question about how employment relationships should work. Should employers have freedom to do essentially what they please, on the basis that it’s their money and their business at the end of the day? Or should we view an employment relationship like any other contract – a binding agreement between two equal parties, wherein if the financially weaker party feels mistreated there is redress under the law? That’s the fundamental question, and that’s what we should be talking about, rather than getting caught up in a set of rhetoric about how not being able to sack people is stopping the economy from growing.

So, how should work work? Does he (or she) who pays the piper simply call the tune, or should employees have strong protection under the law? Does employment regulation stifle entrepreneurism? Feel welcome to let me know what you think in the comments. It’s probably a topic I’ll come back to, not least, because we’ve not had time to discuss Beecroft’s thoughts on equal pay yet. They’re a whole blog post on their own. Watch this space.