This anonymous guest post delivers a devastating critique of the Beecroft report, from the viewpoint of a trade unionist who is a Unite workplace representative. The guest’s views are their own and not that of the union they are a member of. Our guest is also keen to point out that they are not a legal expert and notes that “it would appear from the report, neither is Beecroft.”
There is nothing of merit in this report and much that will damage employees, and eventually employee/employer relations. Beecroft contains many red line issues for the Labour/Trade Union movement, largely as the result of the dismantling of hard won rights and the disproportionate effect it will have on low income workers and women.
The first myth to dispel is the idea of a causal link between lax labour market regulation and growth, which Beecroft implies, given that the UK has the third worst employment protection in the OECD below the US and Canada and still has sluggish growth at best.
Len McCluskey has already signalled that unions would consider illegal forms of protest and civil disobedience to protect employment rights. This was couched largely around the changes to tribunals and ballots for industrial action. I would assume Len’s position still applies: Prospect recently voted on a motion at their conference attacking Beecroft and the proposed employment tribunal changes.
I anticipate further votes and motions as other unions meet over the summer, a strategy to be developed by each union with the STUC and TUC. I also think that the attack on employment rights will loom large in the planned mobilisation on October 20th.
It remains to be seen how far Len McCluskey can take his members along the road of protecting employment rights. For such a campaign to work, it needs to appeal beyond the committed core of activists, shop stewards and representatives. However, there is hope: the “68 is too late” campaign appears to be gaining traction with the general public.
How we might have laughed (or maybe not) at the David Cameron/Life on Mars posters before the 2010 UK general election, but the changes to employment law proposed pull us back to the 1970s. It seems nonsensical that reducing employment protection, encouraging poor management and making people feel less secure at work are ways to generate growth. In fact, it will probably restrict demand. Business wants the banks to lend, lower taxes and to increase demand (not that I agree with the second one) for their products to grow, not the power to sack on demand.
The current balance is about right and it works. The coalition and in particular the Lib Dems would do well to remember the dictum, “if it ain’t broke don’t fix it”. The legislation that currently exists has been developed over decades to improve the balance between the rights and responsibilities of employers and employees and have created an environment where companies manage and develop staff, rather than use the threat of dismissal to motivate/inspire fear (delete as appropriate).
So why have I got a bee in my bonnet over Beecroft?
Compensated No Fault Dismissal
This recommendation removes constructive dismissal, allowing no fault dismissal to largely replace redundancy. It gives carte blanche for employers to sack without reason or recrimination unless such a sacking triggers a ground for unfair dismissal. Beecroft points the finger at public sector managers, claiming they are more reluctant to dismiss than those in the private sector without producing evidence to support this contention. My experience suggests managers in both sectors are reluctant to dismiss, viewing it as a last resort. The no fault dismissal allows compensation only of up to £12,000 dependent on length and type of service.
This proposal would effectively tear up the Employment Relations Act and subsequent amendments to improve workers’ rights under it. Yet, it ignores the reality that poor employee performance is often, at least in part, attributable to poor management. So rather than tackle that condition, Beecroft gives managers a sackers’ charter which will allow poor management to flourish. This would be bad for business, demand, growth and people who would have to work with the constant threat of being sacked hanging over them like a sword of Damocles.
There already are powers to dismiss as a result of poor performance but they are often used improperly or inconsistently by employers, resulting in tribunal claims. Performance management of staff is critical to make the most of them and that includes reward as well as discipline, something which Beecroft neglects. As a wise aunt once said “you catch more flies with honey than with vinegar” and Beecroft’s proposals distil only vinegar, attaching blame to employees above all else. He also seems not to understand what probation periods are for.
Also of concern is the extension of tribunal qualification to two years. This will also have a disproportionate effect on women dismissed in pregnancy (unfairly) and on the ability of individuals to challenge the grounds for dismissal in the first year of employment. It represents a substantial erosion in employee rights and could lead to the reinstatement of poor employment practices that the availability of tribunals at one year had begun to weed out, particularly keeping the minority of unscrupulous employers honest.
Exemptions for Small businesses
Beecroft proposes that small businesses should be allowed to opt out of statutory duties on unfair dismissal, pension auto-enrolment, the right to request flexible working (other than for parents and carers, which is required by a European Directive), flexible parental leave, licensing for employers of children, gangmaster licensing and equal pay audits.
The most worrying of these, in light of the Morecambe Bay tragedy, is the opt-out of gangmaster licensing. All gangmasters tend to be small businesses with a highly casual workforce, and employee abuses – spurious deductions from pay, below minimum wages, employing illegal immigrants, flouting health and safety law – tend to have occurred as a result of the lack of a licensing system. This area of employment, together with the employment of children, require regulation to provide some protection to the most vulnerable workers.
The withdrawal of the ability to flex parental leave between parents might work against small companies, as it effectively forces mothers to take all their maternity leave instead of sharing it with their partner. Having worked in a small company, employees tend to take a more pragmatic approach to matters like parental leave: many individuals often elect voluntarily not to take all their entitlement but that does not mean they should lose their legal entitlement to such protections and conditions.
Pension auto-enrolment might be the bane of employers, but it is good news for employees everywhere, in their retirement. Over half of the UK population has no provision outside of the state pension; to scrap this measure for small companies is short-sighted and will result in individuals suffering poverty in their old age, putting additional strain on services and society.
Perversely, this recommendation could make small companies – the majority of firms in the UK economy – less attractive places to work. Far from enabling growth, it could stifle it.
The rescinding of third party harassment provisions in the Equality Act 2010 would mean that employers will no longer be responsible for preventing staff suffering discrimination from colleagues or customers. This statutory protection has always been about establishing a safe environment for all employees, free from all discrimination: removing it would represent a retrograde step.
Beecroft suggests that it is “naive in the extreme” to think that discrimination can be prevented through policies on dignity at work, bullying and harassment for staff. What is naive is thinking that rescinding such protections will do anything other than increase the potential for discrimination.
The report also recommends the re-application of the default retirement age at a higher age than 65 to enable companies to remove underperforming older workers and to encourage hiring older workers at the same time. Yet, it was EU law on age discrimination that removed the default retirement age; it remains to be seen if the UK has the power to reinstate it.
The retention of older people in the workforce can present a barrier for younger people but labour statistics show that older people are suffering some of the highest levels of unemployment currently. Reinstating the default retirement age without researching the implications could be counter-productive at both ends of the employment age scale.
Employment Tribunal process and awards
The key changes here are the introduction of fees, capping of loss of earnings awards and the introduction of a reduction in basic and compensatory awards. The report also suggests that the use of no-win, no-fee arrangements for tribunal claims be reviewed.
Beecroft recommends fees of between £200 and £750 for claims up to £29,999, depending on their size and complexity, and £3,750 for higher claims. The ability to pay would be based on wealth as well as income.
These costs would deter many from taking up potentially valid tribunal claims (even though in practice many would see the fees remitted if they met income and wealth criteria). This is a policy that puts a price on access to fair treatment and should be opposed vigorously by the trade unions.
By focusing on preventing frivolous tribunal claims, Beecroft is ignoring reality, in that very few matters reach tribunals, with most cases being resolved locally. Tribunals are a necessary last resort, for which the bar is already relatively high – many claims fall due to legal issues – and as such should remain free at the point of making a claim. In effect, he is trying to ‘solve’ a problem that does not exist.
Currently, certain tribunal awards are uncapped, including those relating to discrimination. Beecroft would change this, hampering tribunals’ freedom to pay appropriate compensation and establish deterrents against future errant behaviour. Again, this is a measure which would reward poor management at the expense of employees.
The report recommends changing TUPE protection to one year and lobbying the EU for significant change, to allow, inter alia, an immediate redundancy option post transfer. Currently, TUPE protects employment terms and conditions of employment for up to two years when a company or organisation changes ownership. After that, employers can negotiate/enforce changes to contracts of employment to harmonise terms. In its current form, TUPE provides a reasonable time to allow for adjustment and negotiation and to protect lower paid employees from the effects of contractual changes for two years.
Reducing TUPE to a year will remove protection of working conditions more quickly, such as pension provision, holidays and contracted hours. As TUPE transfers tend to protect lower skilled and paid roles eg dinner ladies, refuse collection, personal care, transaction finance/HR, it is easy to see how Beecroft’s proposal could hurt those workers on low incomes hardest.
The Beecroft recommendations signal an open declaration of intent by the UK Government on normal working people. Socio-economically the changes would affect the most vulnerable and poorer workers disproportionately. Many of these are women.
And while the trade unions can be expected to fight these changes, what of employees – often poorer – who work in non-unionised workplaces. Already, they are often viewed as ‘disposable’ due to their skill level and are often unaware of their rights.
Consequently, they are most at risk from the impact of poor management and employment practices. Exempting small businesses from many key employment protections makes employees here – in the vast majority of workplaces across the UK – much more vulnerable to poor practice. The same applies for temporary contract workers. If this sackers’ charter goes ahead, expect more temporary and fixed term contracts and sackings before twelve weeks to prevent employees assuming rights and protections.
For all these reasons – and more – Beecroft is wrong. He has taken no account of the potential human impact of his policy advice nor has he provided evidence to back up his economic arguments.