28/10/2011

Employment e-Brief – Cutting out the deadwood

Leaked Government report states that unproductive workers should lose their right to claim unfair dismissal.

The report was commissioned by the Prime Minister and written by Adrian Beecroft, a venture capitalist and Conservative Party donor. The main issue discussed is the age-old problem which faces many employers: underproductive staff and how to cut out the deadwood without facing tribunal claims following their dismissal.

The report argues that if those employees who “coast along” could be fairly dismissed they could be replaced with more capable candidates, boosting economic growth. Firms would be more likely to expand in the proposed knowledge that taking on unknown entities in recruiting new employees would not be as high a risk, as they could be dismissed for below par productivity. The report discusses that there is currently no such absolute sanction available to employers for dealing with coasting employees which are virtually impossible to dismiss without the risk of further and costly action.

Mr Beecroft went further by attacking the current laws on unfair dismissal as a whole, with particular but not sole focus on its abuse by those in the public sector. The final document will reportedly consider the issue of the lengthy and complex process currently required to dismiss an employee fairly, making it too easy for employees to claim unfair treatment and gain compensation. It will discuss the impact of the current unfair dismissal rules on the efficiency and competitiveness of businesses and the cost of public services.

The report is currently being considered by David Cameron and the cabinet.

Comment

News of this radical report will understandably prick the ears of employers, but celebrations should not be commenced prematurely. The suggestion of replacing unfair dismissal laws and returning to the Dickensian situation where the balance is very much tipped in the employer’s favour would undoubtedly be fiercely opposed by trade unions and some Liberal Democrats.

The theory that such a drastic sea change in employment law would drag the country out of recession is misguided at best and provokes many questions. The most pertinent would be – how on earth would the standard of “productivity” be measured across a vast range of sectors? There would be no feasible way of knowing whether an employee was dismissed due to productivity or if they were simply not liked. In addition, employees would perhaps be more likely to make a claim for discrimination as an alternative and there would potentially be serious concerns over job security in a time of high unemployment.

We have already received the news that the qualifying period for a claim of unfair dismissal is to be increased from 1 to 2 years service from April 2012. The Government is clearly at least considering the issues faced by employers and the report will undoubtedly be a catalyst for further discussion on what many see as the onerous hoops employers must jump through to deal with their own workforce.

For more details please contact any member of the employment team.