Analysis: Will the Beecroft employment law review hurt workers?
By Nick Branch
Adrian Beecroft is a venture capitalist and donor to the Conservative party who was charged by the coalition government with conducting a review into the state of UK employment law. The Beecroft report into employment law was drafted in August and September 2011 and was part published by the Daily Telegraph last October, before its full publication in May 2012.
Amid the current financial crisis, the government has targeted deregulation as a key force to drive economic recovery. The exact logic is unclear but is perhaps best summed up in the preamble to the Beecroft report, which describes how making it easier to dismiss underperforming employees will result in higher employment rates because jobs will be taken by more competent individuals.
The contents of the report have shocked many, not least for their scope in removing large portions of existing employment law, which protects many employees from rogue employment practices.
What are the Beecroft reforms?
The key parts of the Beecroft employment reforms are as follows:
• Introduction of a compensated 'no-fault' dismissal which would allow employers to dismiss an employee for no reason, providing they pay compensation equivalent to redundancy pay – removing constructive dismissal and many unfair dismissal cases
• Exemptions to many employment laws for small businesses with fewer than ten employees
• Rescinding of the third-party harassment provisions in the Equality Act 2010
• Reintroduction of a higher default retirement age (DRA)
• Review of the employment tribunals process to be conducted and recommendations implemented
• Imposition of a fee for employees to use an employment tribunal
• Other recommendations on
– Work permits
– Bringing in workers from abroad
– Criminal records checks
How will the Beecroft reforms affect UK businesses?
The Beecroft reforms have attracted considerable comments from UK business leaders and politicians. Vince Cable the business secretary described ideas that unfair dismissal could be scrapped as "utter nonsense" and criticised "ideological zealots who want to encourage British firms to fire at will".
However, the reality is that many of Beecroft's proposals were already government policies, or being considered for implementation.
The qualifying period for employees to bring an unfair dismissal case has already been increased from one to two years. A consultation has been launched to look at rescinding third party harassment provisions in the Equality Act 2010.
The Department of Business Innovation and Skills is monitoring the impact of the removal of the default retirement age which was formerly set at 65 and has announced it will formally review the policy in 2016.
The government has already announced a far reaching review of employment tribunals, and last month announced that fees will be introduced for employees wishing to bring a case.
How will these reforms affect employees?
There is no doubt that employees are facing an erosion of some of their current employment law protections. The imposition of a two year qualifying period for many unfair dismissal claims which came into force this April will affect the millions of UK workers who have been in their jobs for less than two years. Some argue that this may promote poor management practices towards new employees, although there is no evidence for this at present.
The majority of Beecroft's other reforms will apply only to smaller businesses, although some of the wider changes on criminal records checks and work permits will have a broad impact.
Changes to the employment tribunal system which are being consulted on at present will change the way employees will approach the system, but it is highly unlikely that charging a fee will deter someone with a genuine case from approaching an employment lawyer for legal advice.
Nick Branch received his LLB from the University of the West of England in 2004 before going on to work as a drector of two property-related businesses. He is currently studying to become a doctor on the fast-track graduate entry medicine course at King's College London and is regular writer for Contact Law on law-related topics.