Wednesday 26th October 2011 at 10:42am

Employment Tribunals, a venture capitalist writes

The papers have been sent leaked extracts of a new Number 10 report, to the effect that workers should lose their right to claim unfair dismissal.

The report was written by Adrian Beechcroft, described as a “venture capitalist”, which does make you wistful for the old days of long ago when Tory policy was made up by people who claimed at least some knowledge of the area of life which they proposed to alter; instead of the present, where expertise seemed to be established by saying simply “you’ve got to do what I want, I’m very rich.”

It’s hard to comment meaningfully on proposals which are poorly reported, and appear thin at best, but:

1. Beechroft’s particular target seems to be the difficulty that employers have in dismissing workers on grounds of capability. It would be interesting to know if anyone had done any research on what proportion of all dismissal claims relate to capability dismissals, and what proportion of them claimants win. My own experience is that capability dismissal more rarely lead to claims than say misconduct dismissals (which represent a much greater black mark against the worker’s future career). Capability claims are also much shorter than misconduct claims (i.e. less costly to the employers). It would be a shame – to say the least – if an entire strategy for the Employment Tribunal system was based on a relatively exotic species of claim, which causes employers relatively little loss.

2. The rationale for the proposals appears to be that all Britain’s economic woes would be cured if only employers could fire more easily. (This is the point at which relying on the economic advice of a venture capitalist appears particular well … tacky).

At various points in my book, I give figures for the rate of dismissals in the UK economy. To summarise them, my best estimate is that since ETs were introduced the rate of dismissals has more than doubled. Before the recession began in 2008, dismissals were about twice as frequent as they were in the late 1960s, and dismissals seem to have doubled again since 2008.

In other words, even with the “shield” of Tribunals, sackings are about four times as common as they were a generation ago. Why on earth should we want to make it easier for the bosses to dismiss even more people?

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