With the Budget approaching, dark forces within and around the Coalition Government have been trying to re-launch their seemingly stalled campaign for a right for employers to fire workers at will, without reason or procedure.
The ‘no fault dismissal’ proposal – set out most notably in a report to the Prime Minister by the Conservative Party donor and venture capitalist Adrian Beecroft – generated a minor political storm in October last year, when a draft of Beecroft’s report was ‘leaked’ to the Daily Telegraph. To the obvious displeasure of many Conservative MPs, the proposal was quickly rejected by the Business Secretary, Vince Cable, and dismissed as ‘madness’ by his fellow Liberal Democrat MP, Norman Lamb. At the time, Lamb was parliamentary aide to the deputy Prime Minister, Nick Clegg, but he has since replaced Ed Davey (promoted to fill Chris Huhne’s place in the Cabinet) as employment relations minister at Cable’s Department for Business (BIS).
In November, it looked as if Cable and Davey had kicked the proposal into Whitehall’s long grass, when BIS announced that it would be issuing merely a ‘call for evidence’, not a consultation as such, on introducing ‘no fault dismissal’ for micro firms only (i.e., those with 10 or fewer employees). Cable let it be known that, if indeed there was any evidence to support the proposal, he had not yet seen it.
However, on 20 February, the Times reported on the publication of a pamphlet by the Free Enterprise group of Conservative MPs, calling for small businesses to be exempted from all legal provisions on unfair dismissal. As well as a news report, the Times gave the pamphlet’s author, Elizabeth Truss MP, a 900-word column to puff her own work – not bad for a pamphlet of just 1,500 words, and very few facts.
Later the same week, both the Independent and the Times reported that the Chancellor, George Osborne, was coming under pressure from ‘figures on the Tory Right’ to ‘make it easier to fire underperforming employees’. One of these figures was clearly the former Defence Secretary, Liam Fox, who was reported saying that ‘it is too difficult to hire and fire’.
Then, on 6 March, Osborne himself weighed in on the side of the agitators, suggesting in a speech to engineering firms that they should lobby Norman Lamb on the issue. Confirming that BIS will shortly be issuing the above mentioned call for evidence on ‘no fault dismissal’ for micro businesses, he reportedly noted that ‘plenty of trade unions and others will be submitting their evidence for why we shouldn’t do this. If you think we should, then don’t wait for someone else to send in the evidence. Send it in yourself”.
It’s strange, but none of those pressing for ‘no fault dismissal’ – otherwise known as ‘dismissal for good reason, bad reason or no reason’ – ever mention the Employer’s Charter, launched with much fanfare by the Prime Minister, David Cameron, in January 2011.
This clearly states that employers already have the right to ‘dismiss an employee for poor performance’. All that is required of employers is that they follow a fair procedure. Nor do they ever seem to mention that they have already succeeded in extending the qualifying period for even this basic level of protection, from one year to two years’ service, with effect from 6 April.
The fact is that this limited legal protection against unfair dismissal did not get the economy into its current state, and further erosion will not bring about an economic recovery. Those calling for ‘no fault dismissal’ are simply taking advantage of the economic downturn to pursue an ideological, anti-regulation agenda. Time will tell whether Cable and Lamb have both the will and the political clout necessary to resist the pressure being brought upon them. And whether Labour will support them.
Richard Dunstan is a policy wonk who has worked for Citizens Advice, the National Audit Office, the Law Society, and Amnesty International UK.