Coalition Government is proposing widespread change to the
employment law system, ostensibly as part of its strategy to boost
However, its approach to
employment law reform could also be viewed as a "war on how we work"
, argues Sunday Telegraph Business Editor Kamal Ahmed.
Ahmed says that these reforms are ultimately intended to enshrine a
view that - at its simplest - "employers should be allowed to get on
with managing their companies."
Here we take a look at recent employment law reform proposals and consider how they relate to Ahmed's theory and assess the potential impact of some of these proposals on economic growth.
Overview of recent employment law reform proposals
Recent weeks have seen a number of major announcements on employment law reform:
The legacy of the Coalition Government
- The Queen's Speech included a raft of business legislation,
which the Government said was aimed at "creating the right conditions
for businesses to grow and succeed". These include measures to "overhaul
the employment tribunal system, cut unnecessary red tape for businesses
and reform directors' pay." XpertHR provides detailed guidance on the
Queen's Speech and its implications for employment law
and on the specific reforms relating to employment tribunals.
- Venture capitalist Adrian Beecroft's Report on Employment Law,
which proposes many radical reforms intended to boost growth (and from which the concept of
compensated no-fault dismissals
originated) finally saw the light of day. The report generated
including upheaval within the Coalition Government.
- The Enterprise and Regulatory Reform Bill
included details of proposed measures aimed at "improving the employment
You can read analyses of the Bill from XpertHR, Personnel Today's Laura
and from lawyer Laurie Anstis.
- Unfair dismissal compensation could be slashed. Barrister Anya Palmer argues that one proposal within the Enterprise and Regulatory Reform Bill, if enacted, would pave "the way for a major reduction in employment rights"
in the future. Palmer points out that the Bill "contains a provision
that would give the Government a very broad power to slash compensation
for unfair dismissal to a third of its present level at any time in the
future, without further debate." She says that this provision may not
come into effect in the near future, but notes that "it's not
unreasonable to suppose that if the Conservatives won the next election
they would promptly reduce the limit across the board."
- 'Settlement agreement' proposals: The Guardian reports that today's second reading of the Enterprise and Regulatory Reform Bill in the House of Commons will additionally include a proposal to introduce 'settlement agreements' for all employers. It says that the proposed 'settlement agreements' will make "it easier for companies to sack their workers by offering them immediate payouts if they agree to leave without any fuss." However, legal expert Darren Newman argues that the 'settlement agreement' proposals represent nothing more than a "cosmetic change" to employment law. He says: "As currently drafted, the only the change that the Bill makes to the current system is to change the name of 'compromise agreements' to 'settlement agreements' - which is the absolute epitome of a cosmetic change. It has no practical or legal impact whatsoever." (See Update 19 to my Beecroft post for further details).
Guardian's Phillip Inman argues that the proposed employment law
reforms set out in the Queen's Speech can be viewed as part of an
ongoing project shared by a number of European governments to pursue
"growth built on cuts in workers' terms and conditions"
view would appear to be borne out by William Hague's statement in a May 2012 interview with the Daily Telegraph
that radical reform to the labour market and the welfare system will be
the legacy of the Coalition Government
[W]e are recreating the
work ethic for everybody in Britain. I think that these reforms will be
seen in the 2020's as being as important to this country as the trade
Union reforms and privatisations were of the 1980s. This is as
fundamental as that. This is the purpose of the Coalition Government.Will renewed growth result from radical employment law reforms?
The Coalition Government argues that a general reduction in 'red tape' is essential to promote growth. This narrative was particularly strongly argued with relation to the Beecroft report
So does this mean that if the proposed radical reforms to employment law were enacted, strong economic growth would be inevitable?
Read the complete post at http://www.xperthr.co.uk/blogs/employment-intelligence/2012/06/is-the-coalition-government-wa.html
11 Jun 2012 8:00 AM
XpertHR - Employment Intelligence
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