24 May 2012

Professor Keith Ewing, President of the IER

Even the limited rights of British workers are too much for the Tories and very rich Tory donors such as Adrian Beecroft, the pay-day loan merchant who now advises Cameron on how to sack workers.

On the eve of the general election in 1997 Tony Blair famously said that Britain was the most lightly regulated labour market in Europe, and that under New Labour it would stay that way. He kept his word.

But even the limited rights of British workers are too much for the Tories and very rich Tory donors such as Adrian Beecroft, the pay-day loan merchant who now advises Cameron on how to sack workers.

It is of course the case that the government has already cut back on workers’ rights not to be unfairly dismissed, with the recent increase in the qualifying period for unfair dismissal.

This means that workers will have to be employed for two years before they can bring a claim, a requirement that many labour lawyers feel will not survive legal challenge on the ground of its potential to discriminate against women.

But that is by no means the end of it. Important procedural changes are being introduced to the unfair dismissal system, including a requirement that workers who bring a claim will have to pay to use the tribunal – an unconscionable attack on the right of access to justice.

But Beecroft wants to take us further, and with the leak this week of his unexpurgated Report on Employment Law we now know just how far he was prepared to go. Unfair dismissal would be removed from every worker, to be replaced with the employer’s right to no fault dismissal.

This means that workers can be sacked for any reason or no reason. If the employer no longer likes the cut of your jib, it would be ‘thank you, good night and goodbye’. Provided the employer paid the equivalent of a modest redundancy payment, there would be no comeback.

In making proposals to roll back employment rights to the 19th century, Beecroft accepted that ‘some people would be dismissed simply because their employer did not like them’. But while this was ‘sad’, it was ‘a price worth paying’, a phrase we have heard from other Tories.

In the short term at least these no fault dismissal plans seem to have been sabotaged from within the government, though they may yet be introduced for small businesses (who Beecroft thought should have a complete immunity from unfair dismissal).

But the Beecroft Report is not only about unfair dismissal. Its 24 pages of ideological poison include many other threats that have avoided media discussion, including proposals on discrimination law, parental leave, and flexible working.

A matter of particular concern is the proposal to reduce the redundancy consultation period, again to make it easier to sack workers. Under the present law, employers must consult at least 90 days before dismissals in the case of mass redundancies of more than 100 people.

The plan to reduce 90 days to 30 days is very cynical and would have the effect that no meaningful consultations would take place. Quite simply there would not be enough time for unions to engage in meaningful consultations or to offer alternatives to dismissal.

It is all the more cynical for the fact that apart from allowing employers to invoke mass sackings after only 30 days consultation, it will also allow them to impose changes to workers’ contracts effectively by giving only 30 days’ notice.

This is what has been happening in local government and the fire service with the so-called ‘section 188 notices’. Until now, however, the big employers had to give 90 days notice before swinging the axe to working conditions.

So this is a really important proposal, overlooked in much of the press comment. But again it reveals the stupidity and superficiality of what is being proposed. In my view, it would not be possible to move to a fixed 30 day consultation period, and any attempt to do so would be illegal.

This is because the statutory collective redundancy procedure is based on EU law and any changes to the procedure must be consistent with the requirements of EU law, which imposes two duties on employers in the event of a collective redundancy.

The first of these is a duty to inform the government of the mass redundancies. This has to be done 30 days before the first dismissals take effect. The second is to inform workers’ representatives. This must be done ‘in good time with a view to reaching an agreement’.

Under the present law, the 90 day consultation period in the case of redundancies of more than 100 workers is likely to meet this obligation. True, it is arbitrary. But it has the virtue of certainty. Everyone knows where they stand. It helps both employers and unions.

If in a fit of ideological stupidity the 90 day period is removed and replaced with 30 days’ consultation with trade unions, this will be as much a disaster for employers as it will be nasty for workers faced with the risk of redundancy and cuts.

This is because a 30 day consultation period is too short and will not be consistent with EU law. In every collective redundancy employers will be in a legal ‘no man’s land’, required to consult ‘in good time’, but not knowing what that means on a case-by-case basis.

What will thus happen is that unions will rightly challenge every collective redundancy in the employment tribunals on the ground of shortage of notice, until eventually the matter ends up in the European Court of Justice and until the government is required to change the law.

One other reason why the 30 day proposal will be wholly counter–productive is that it will unlock other legal rights of trade unions which so far are lying dormant and largely unused. These are the rights to information and consultation introduced in 2004.

The implementation of a 30 day rather than a 90 day consultation period will create an information and consultation space that unions will be free to fill by invoking the 2004 regulations. Mr Beecroft’s legacy thus may not be the one he wanted.

What the redundancy consultation procedure proposals reveal is a hastily drafted, ill–thought out, and weakly reasoned set of proposals, failing fully to anticipate the consequences of what is being proposed, and failing also to engage with the inconvenient demands of EU law.

That such far–reaching proposals could be explained, justified and defended in only five lines is extraordinary. But so too was the failure of New Labour to ensure that British workers had stronger rights to deal with the assaults they now face.

This article was first published in the Morning Star.

Professor Keith Ewing and IER Chair John Hendy QC analyse the legality of protest against government cuts in employment law publication Days of Action.

Or for more on regressive Tory policy, see the spring 2011 issue of labour law journal Federation News.

Keep abreast of the most recent changes in employment law at the IER’s annual update on employment law seminar