Since our post on May 30 the Beecroft Report has come under sustained castigation, the latest attack from the Chartered Institute of Personnel and Development (CIPD) http://www.cipd.co.uk/ not mincing its words in describing some of the Report’s proposals as “objectionable and unnecessary”.
The basic principle around which the Report is built, and to which our PM subscribes, is that if the risks and potential costs inherent in hiring new employees are reduced, companies will employ more people. Make it easier to sack employees. This will create jobs. Do we really need to point out the obvious flaw here? Business Secretary, Vince Cable, has in suitably measured terms dismissed the Report as “bonkers” and “complete nonsense”. Reassuring to hear that our Coalition cabinet ministers are playing nicely together.
Apparently 17 of the 23 Beecroftian recommendations are already being put into action, while the rest are subject to consultation until 8 June. So based on evidence collated by BIS http://www.bis.org/, your guesses please for the No.1 top spot for the biggest concern employers face when hiring staff:
Yes, that’s right, at No.1 we have…health and safety. Hang on, that can’t be right. It is? Well, surely unfair dismissal claims will come in a close second? Maternity/paternity leave, you say? At least in the Top 10, then? Here they are:
- National Minimum Wage
- National Insurance
- Employer’s Liability Insurance
- Working Time Regulations
- Sickness Absence
- Time off to Train
In fact only a tiny 1% of those organisations that identified employment regulation as a deterrent to hiring named dismissal as the top concern.
The Call for Evidence also revealed that more than half of all unfair dismissal claims include discrimination and/or automatic unfair dismissal elements, and that is before any changes of the sort proposed. So much for reducing risk. The median award in 2010-11 in unfair dismissal cases was £4,591 which does tend to pour cold water also on George Osborne’s rhetoric of businesses being “sued out of existence” just because a successful claim can in theory result in an award for £85,200. In the same year the median sex discrimination award was £6,078, so the spectre of unlimited compensation there is also a threat more apparent than real.
And if that wasn’t enough, according to BIS’ own evidence the UK is already ranked top 3 in the world for ease of dismissal of individual employees. By contrast, on a test of stringency of collective employment protection, the UK is a tougher place to implement large-scale dismissals than the OECD http://www.oecd.org/home/0,2987,en_2649_201185_1_1_1_1_1,00.html average. Perhaps that is where the Government’s proposals should be focussed.
You would be forgiven for calling into question the purpose and value of the Government (and those who replied) investing time and money in such research if the evidence is to be so readily disregarded and not utilised to come to some sort of balanced conclusion.
Beecroft’s idea of ditching some poor-performers for better ones is arguably a sensible blueprint for commercial efficiency, but this “solution” is already entirely achievable. Yes, there is a process to follow and it takes some time and a little effort, but there is absolutely nothing stopping a company dismissing an under-performing employee and hiring someone else. If it ain’t broke, don’t try to fix it, I say.