Beecroft Report on employment law reform: a storm in a teacup?

Beecroft Report on employment law reform: a storm in a teacup?

Published:

Author: Elizabeth Parkin

The Government has been forced to publish a controversial report on reforming employment law prepared for the Department of Business last year

After comments about the report by Vince Cable were made in the media the Department of Business (BIS) published the report on 21 May 2012.

It is clear however that the reforms suggested by venture capitalist Adrian Beecroft in his report of October 2011, have either already been rejected by the Government or taken forward in some way.

In a newspaper article about plans to reform employment law, Vince Cable allegedly labelled the proposals in the Beecroft Report "complete nonsense" and talked about making a stand against those he regards as "ideological zealots".

Mr Beecroft's report appears to have been commissioned by BIS because the Government is under pressure to increase growth and encourage businesses to take on more staff. It has already committed to cut the red tape during the life of this Parliament, which it believes is a barrier to economic recovery. Inevitably, however, changes to employment law expose the ideological fault lines between the Coalition partners in Government, hence the intense media speculation of the last few days.

Government response to the Beecroft Report

The Beecroft Report made a number of proposals across a wide range of employment legislation. The Government has now published a note setting out the details of the suggestions that it is taking further and those it is not.

Taking further or considering

Repealing third-party harassment provision in the Equality Act

  • Reviewing the impact of the removal of the default retirement age in 2016
  • Employment tribunal reform including streamlining rules of procedure
  • Portable CRB checks - will be available from 2013
  • No fault dismissals (allowing an employer to dismiss anyone without giving a reason provided that they make an enhanced leaving payment) for smaller businesses. Call for evidence ends on 8 June.
  • Removing so-called "gold plating" from TUPE, in particular in relation to the service change provisions. Call for evidence now closed and Government currently considering whether to issue consultation paper.
  • Reducing the consultation period for collective redundancies to 30 days regardless of the number of employees at risk of redundancy. Proposals will be out for consultation "soon".
  • Delaying implementation of pension auto-enrolment for small employers until the next Parliament.

Proposals not being taken forward

A permanent exemption from pension auto-enrolment for micro businesses (less than 5 employees).

  • No fault dismissals for all employers.
  • Capping the amount of compensation in discrimination cases (this would be contrary to European law).
  • Not implementing the Agency Workers Regulations - these came into force on 1 October 2011.
  • Simplifying immigration regulations as this is out of step with the Home Office's broader immigration priorities.

Comment

Despite the media furore regarding the Beecroft Report and Vince Cable's comments, the question remains whether trying to fix an economic crisis by tinkering with employment law is the right approach?

Vince Cable has stated his belief that it is rare to hear employers complaining that it is legislation preventing them from recruiting and growing their businesses. Employers and especially small businesses are struggling to grow for a variety of reasons, including the lack of available funding and the impact of the financial global crisis on demand for UK services and goods.

The reality of the situation is that the Government's room for manoeuvre is severely limited by Europe. So much of the UK's employment law is now decreed by the European Union and securing agreement to changes at that level is very difficult.

When the domestic political banter dies down and the practicalities of implementing these proposals are reviewed in the cold light of day it may be that the impact of Mr Beecroft's report is very limited indeed.