Business secretary Vince Cable has recently announced a consultation on changes to employment legislation. The proposed reforms are intended to facilitate growth in businesses by reducing the risk of costly employment litigation associated with recruiting new workers. There is, however, a concern that in doing so, employees’ rights are being eroded.
Amongst the areas being considered for reform is “no-fault dismissals’, a Government proposal allowing employers with less than 10 employees to be able to dismiss unproductive workers with basic redundancy pay and notice. There is an argument that the proposed reforms will instil fear of job insecurity into employees, weakening the labour market during a time when the economy is struggling.
Another of the proposed reforms is to introduce “protected conversations’ to allow employers to confront unproductive employees in order to eliminate risk for employers of being taken to a tribunal. In addition, the period for collective redundancy consultation may be reduced from 90 days to 60, 45 or even 30 days.
Vince Cable also confirmed that the qualifying period for unfair dismissal will increase from one to two years, meaning that the length of service required in order to make a claim will be doubled. It is not difficult to understand why employers will welcome the opportunity to be able to hire and fire employees with fewer consequences, but what does this mean for the ordinary worker?
It is argued that the reforms are not intended to encourage a hire and fire culture, rather they are intended to give employers the confidence to take on new employees. However, this attitude could lead to workers rights being further and further diminished. While business groups such as CBI and the British Chambers of Commerce welcome proposals, unions oppose the idea.
With the number of cases going to the Employment Tribunal having risen 40% over the last three years, it is widely recognised that the existing dismissal process needs reform. Clearly, these proposals, if implemented, will reduce the number of cases going to tribunal stage and save businesses up to Â£40m a year, but at what cost to employees?