The buzz about Beecroft and no-fault dismissals

The notion of no-fault dismissals has split the business world in two.

Adrian Beecroft’s proposals for no-fault dismissals have been so divisive that they have overshadowed all his other recommendations. The split of opinion isn’t just between businesses and employees, or Conservatives versus Liberals; it seems to come down to a very personal matter of conscience.

Arnab Dutt, managing director of specialist manufacturer Texane, writes in: ‘As an employer, you might expect me to welcome the Beecroft report on changes to employment law. But I don’t believe that undermining people’s rights will make Britain more competitive.

‘There are some decent suggestions in the report but some of the recommendations – especially “no fault” terminations – are Victorian.’

Richard Branson, on the other hand, isn’t so sure. When asked on Radio 4’s The World This Weekend if he agreed with the proposals to make firing employees easier, the Virgin founder remarked, ‘People are completely free to leave a company any time they want and maybe there should be some flexibility in the other direction.’

Even the employment law specialists are split down the middle. Michael Slade, managing director at business advisory firm Bibby Consulting & Support, reckons ‘it is imperative that employers have the ability to dismiss employees who are underperforming without the fear of getting wrapped up in red tape’. But Edward Wanambwa, a partner at law firm Russell-Cooke calls the proposals ‘excessive’, arguing that employers already have a two-year period to dismiss staff without facing standard unfair dismissal claims.

I suspect there is a silent majority of businesses which haven’t come forward in support of this for fear of alarming their employees, but who would be quite happy to see it come into force. After all, what business owner wouldn’t want less red tape?

I don’t intend to pass judgement on whether or not Beecroft has reached the correct conclusion. I suspect from a lot of anecdotal evidence that employment rights have swung too far in favour of the employee – with some bosses too terrified of the tribunal to discipline staff appropriately. But we should be careful not to swing back too far in the opposite direction.

Whatever the merits of his proposals, Beecroft’s arguments are pretty shaky. If laws protecting employees are right, then they should not be scrapped or watered down in the cause of promoting economic growth and competing with other countries whose workers are less fortunate. If the laws are wrong, then they are wrong for all businesses, not just those with fewer than ten employees. It’s particularly unhelpful to politicise the discussion by throwing around words like ‘socialist’.

Beecroft has sparked a debate, but his cause will have to be advanced by those with a broader perspective and a more human touch if it is to have any chance of success.

Nick Britton

Nick Britton

Nick was the Managing Editor for when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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