Employment lawyers in angry reaction to No10 report

Employment lawyers have angrily condemned a leaked Downing Street report by a leading Conservative Party donor that recommended scrapping the country’s unfair dismissal laws.

Adrian Beecroft, former senior managing partner of global private equity and venture capital firm Apax, said Britain’s employment laws were “terrible” and undermining economic growth.

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, 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, 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,” he said.

“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.”

Adrian Hoggarth, head of employment at Prolegal, described the abolition of the unfair dismissal laws as a “huge policy shift” and said it was “hard to see this as anything other than a call for employers to be allowed to mismanage staff and escape the consequences”.

Hoggarth said it was “plainly wrong” to say that some employees were impossible to sack.

“There should not be wholesale changes to the law to address failures to comply with procedures that have long been recognised as fair in the workplace.”

Philip Henson, head of employment law at Bargate Murray, said the leaked extracts would “do little more than confuse the general public and spread a contagion of fear in the work force.

“The Ministry of Justice might want to see if it can negotiate a bulk purchase of advertising space for more employment tribunal administrative staff and employment tribunal judges, because if these ramshackle proposals see the light of day again they may well need them.”