Is banning unfair dismissal unfair?

A leaked report suggests scrapping unfair dismissal laws to kick-start growth. Although workers aren't impressed.

by Emma Haslett
Last Updated: 06 Nov 2012
For almost as long as employment laws have existed, businesses have complained that they’re too restrictive/anti-competitive, etc etc – so don’t be surprised if you hear cheers coming from firms across the nation, after a Government report suggested banning workers from claiming unfair dismissal. Businesses are, obviously, in ecstasy over the idea, saying it’ll increase productivity and help boost growth. But should that be at the expense of workers’ rights?

Over the past few years, business’ complaints have made pretty clear that at the moment, dismissing ‘lazy’ workers is an arduous task because of the risk of having to fork out for a tribunal. That’s particularly potent in the public sector, where workers who don’t do their fair share are often given hefty payoffs because their employers are worried about how much a tribunal will cost them. The idea of these plans, drawn up by venture capitalist Adrian Beecroft (and leaked to the Daily Telegraph), is that workers who ‘coast along’ would be easier to banish from the workplace.

Naturally, as per business’ ministrations, this is all done with the aim of cutting red tape, thus creating jobs, thus reducing unemployment, thus boosting growth, thus rescuing the economy from certain death. Which businesses seem pretty sure will be the effect of the plans: ‘This… will bring confidence to employers, and boost productivity in the workplace, which is good for employers, employees, and the economy,’ pronounced the British Chambers of Commerce.

Of course, ‘all’ employees may be something of an exaggeration: as the TUC pointed out this morning, scrapping unfair dismissal creates the opportunity for ‘nasty bosses’ to make, well, unfair dismissals. That said, Beecroft has added a caveat to make sure the idea isn’t entirely ‘politically unacceptable’ (his words, not ours): he wants to introduce something called a 'Compensated No Fault Dismissal', which would allow employers to get rid of staff who weren’t stepping up to the mark with basic redundancy pay and notice. In any case, whatever employers' view of unfair dismissal laws, they all agree that the tribunal process is too protracted, and too uncertain - so either way, it needs overhauling.

What’s particularly interesting is that the Government was never actually planning to release the report at all until it was leaked. Now, though, it’s expected to publish it later this year. So we won’t know until then what the Government’s decision on the matter is: although by that time, any differences with the Liberal Democrats (and expect there to be many) will need to be resolved.  The only word breathed by Downing Street so far is an anonymous source, who told the BBC that it’s ‘unlikely we would go further on unfair dismissal’. Whatever that means.

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