Unfair Dismissal to be Abolished?

She's not the only one getting tupped

The front cover of The Daily Telegraph today reports on how Wimpole Hall farm is setting up a “Ram-Cam” which will follow Paolo (an 18 month old ram) while he goes around mating on the farm.  The headline story though is “Give firms freedom to sack their slackers”, which discloses the existence of a confidential Downing Street report which recommends abolishing the law of unfair dismissal, thus being the second story about getting shafted on the Telegraph’s front page today.

The proposal comes from the Beecroft report, which David Cameron has commissioned to review UK employment law.  It identifies Britain’s “terrible” employment laws as undermining economic growth because it is too difficult and time consuming to sack “slackers”.  According to the Telegraph

“The report says that the unfair dismissal rules have made public bodies “reluctant to dismiss unsatisfactory employees”.”[They] therefore accept inefficiency that they would not tolerate if dismissal of unsatisfactory employees was easier”.

And

“A proportion of employees, secure in the knowledge that their employer will be reluctant to dismiss them, work at a level well below their true capacity; they coast along”

The solution is to replace the rules on unfair dismissal with a concept called “Compensated No Fault Dismissal”, which would “allow employers to sack unproductive staff with basic redundancy pay and notice”.  However, in a seemingly rare moment of true insight Mr Beecroft is said to concede “that employers could then fire staff because they “did not like them”.  The wisdom of Solomon indeed!

This proposal, which is said to be favoured by No 10 and the Chancellor, is like many proposed reforms of supposedly unpopular laws.  It might look well and good from a high level, but just wait until it is you, or your wife, son, daughter, parent who is said to be slacking and thus sent packing.  It’s all very well when it’s someone else who is on the wrong end of the stick, but that is the essence of bad law. This is a fundamentally wrong proposal.

Currently there are only a limited number of fair reasons under s.98 of the Employment Rights Act 1996 for dismissing an employee.  Capability (which is what seems to be under threat here) is one, Conduct another and then Redundancy, “Some Other Substantial Reason” or if the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.  Presumably the latter four would continue to exist.

To suggest that Capability would be replaced by “Compensated No Fault Dismissal” based on a redundancy payout is nonsense.  The roles aren’t redundant and, secondly, if it is proposed that the limit of compensation be restricted to the size of a redundancy payout (£400 or £600 per complete year of service) no one is going to be properly compensated.  Instead all this will achieve is that aggrieved employees will look for ways to bring whistleblowing or discrimination claims to avoid this regime (as they will if the qualifying period for unfair dismissal is increased to two years continuous employment) thus involving employers in more cost and expense.

Mr Beecroft’s concession that this would allow employers to get rid of the staff they don’t like is accurate.  In my experience as a Claimant employment lawyer personal dislike/animosity between line manager and employee is often the root cause of conflict in the workplace, even if it is ultimately dressed up as capability, conduct or redundancy.

The final report is said to be released next month.