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Insight

Radical reform to employment rights?

28/10/2011
This week has seen a number of reports that the government is considering radical changes to employment rights.In a leaked report to the government, the venture capitalist Adrian Beecroft has This week has seen a number of reports that the government is considering radical changes to employment rights.

In a leaked report to the government, the venture capitalist Adrian Beecroft has recommended that unfair dismissal is scrapped.

Nick Clegg has suggested that employers should be able to have “protected conversations” with employees. This would allow employers to have “frank” discussions with employees about their futures without their comments being used in evidence before a Tribunal.

David Cameron is also arguing for Britain’s exemption from European employment law. Reportedly, this is so that UK businesses would no longer be restricted by the Working Time Directive.

The apparent reason for these proposals: a perception that employment red tape is preventing employers from firing underperforming staff, scaring employers away from employing new staff, inhibiting small businesses and ultimately preventing growth.

It is therefore unfortunate for the government that these suggestions have been mooted in the same week that a report by Incomes Data Services confirmed that pay for directors in the UK’s top companies has risen by 50% in the past year. Meanwhile the government has been criticised for the lack of evidence to support the view that business suffers as a result of employment rights.

Managing employees can be difficult, and employers will welcome discussion about where the boundary should lie between employee rights and the interests of their businesses. It is therefore unfortunate that these proposals have been made apparently off the cuff or with little reference to supporting evidence. Inevitably, this will expose the government to the criticism that they are supporting “fat cats” over the rights of the poor. This can only undermine any serious debate on the matter.

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