Cookies on Pinsent Masons website

This website uses cookies to allow us to see how the site is used. The cookies cannot identify you. If you continue to use this site we will assume that you are happy with this

If you want to use the sites without cookies or would like to know more, you can do that here.

Controversial employment law report "not full of new ideas", says legal expert

A controversial employment law report, published by the Government following its leak to a national newspaper, largely ties in with official Government policy or proposed reforms, according to a legal expert.23 May 2012

Employment lawyer Christopher Mordue of Pinsent Masons, the law firm behind, said that it was likely that some of the more radical proposals included in the report (16-page / 185KB PDF) by venture capitalist Adrian Beecroft – including the introduction of 'no fault' dismissals for companies with 10 staff or fewer - would not be followed through on.

"The political controversy around the Beecroft report gives the impression that it is full of new ideas, at the radical or maverick end of a 'pro-business' approach," he said. "A large part of the report actually ties in with reforms already announced or proposed in current Government consultations - just last week for example the Government announced a proposal to scrap the law on third party harassment that makes employers liable for discrimination by customers and members of the public."

Speaking in the House of Commons, Business Minister Mark Prisk said that he was issuing the report early to correct an "earlier draft" that was in circulation.

"The report was intended to feed into the work that the Department [for Business, Innovation and Skills (BIS)] is carrying out to review employment laws to ensure that they maximise flexibility and reflect modern workplace practices," he said. "Over the past few months, Ministers have been working on the red tape challenge and the employment law review. We are already actioning 17 of the 23 topics that [Beecroft] raised."

The report also recommends allowing smaller businesses to opt out of certain employment laws including unfair dismissal, the right to request flexible working other than for parents and carers and the duty to automatically enrol their employees into an eligible workplace pension scheme. The Government has already delayed auto-enrolment for employers with fewer than 50 staff, until May 2015 instead of April 2014, but a phased implementation of the new rules will begin for the largest employers later this year.

"Exempting small employers from the requirement to auto-enrol their workers into a pension scheme looks like an obvious way of saving money, but that exemption would tear a hole in a new designed to catch as many workers as possible and those who slip through the net would face the long-term consequences of failing to save for a pension," said pensions law expert Simon Tyler of Pinsent Masons, the law firm behind "It's not easy balancing up help for employers in the short term or help for workers' long-term pension savings. Beecroft's view is only one among many in this debate."

However, employment law expert Mordue said that some of the changes would "solve real problems", particularly for medium and larger-sized businesses.

"For example, reducing the notification period for large-scale redundancy exercises from 90 to 30 days would allow large-scale restructuring to be implemented more quickly and bring UK law into line with EU Directives," he said. "The cost savings for businesses would be dramatic – where 100 redundancies are proposed, employers could save the equivalent of 6,000 days total pay for the employees concerned, a saving that may mean that fewer redundancies are actually needed overall."

He added that simplifications to the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations, also considered in the report, would allow harmonisation and reduce costs and administrative complexity by preventing the need to maintain different sets of legacy terms and conditions when businesses are taken over by new owners.

"While these steps would reduce employment protection, changes in the right areas could ultimately save jobs by ensuring competitiveness – particularly if the changes are aimed at reducing domestic 'gold plating' of EU Directives," he added.

The Government is currently considering evidence on the introduction of 'no fault' dismissal for so-called "micro firms" with fewer than 10 employees and will be taking submissions until 8 June. However, Business Secretary Vince Cable said in a statement that few businesses found the existing regime a "barrier to growth".

"Businesses are much more concerned about access to finance or weak demand than they are about this issue," he said. "At a time when workers are proving to be flexible in difficult economic conditions it would almost certainly be counterproductive to increase fear of dismissal. We have always been clear that sensible and well thought-through reforms need a strong evidence base behind them, not just anecdotal experiences."

Recent Employment Experience