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Former Apax boss tells Cameron to scrap unfair dismissal laws

26 October 2011

Adrian Beecroft, former senior managing partner of global private equity and venture capital firm Apax, has called for the UK’s unfair dismissal laws to be scrapped in a report for the prime minister.

The government has already announced that it will extend the qualifying period for unfair dismissal claims from one year to two from April 2012 and is considering imposing fees on tribunal claims (see solicitorsjournal.com, 11 October 2011).

According to a copy of the report leaked to The Daily Telegraph, Beecroft, currently chairman of venture capital specialists Dawn Capital, said Britain’s employment laws were ‘terrible’ and undermining economic growth.

Beecroft is reported to have recommended replacing unfair dismissal laws with ‘compensated no fault dismissal’, allowing employers to dismiss poorly performing staff as long as they paid them basic redundancy pay and notice.

The report is said to conclude that there is nothing in European law to prevent our unfair dismissal laws from being scrapped, though the same could not be said of measures aimed at tackling discrimination.

Jo Davis, head of employment at BP Collins, said she could not imagine “for a minute” that the report would be adopted.

“Are we, as a country, really walking away from fairness?” Davis asked. “Do we want to accept that you can dismiss someone unfairly? It would be an indictment of the government if we did that.”

Davis said that companies should know they had a poor performer before their first year in a new position was over.

She added that the pendulum was swinging so far in favour of employers “that the clock is going to break”.

James Davies, joint head of employment at Lewis Silkin, said: “It’s my suspicion that someone took a conscious decision to float this idea to test the public reaction or to soften up the public. It is certainly about politics.”

Davies agreed that UK unfair dismissal laws were unfit for purpose and needed reforming.

“Where I vehemently disagree is that the law must be reformed to enable employers to sack underperforming employees.

“Many employers don’t performance manage effectively, which is bad for business and the economy. There must be an incentive for employers to invest in training.”

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Termination