While journalists at the Daily Telegraph deserve credit for having obtained a copy of the full Beecroft Report, they have done us a considerable disservice by misrepresenting the policy debates, no doubt with the encouragement of some ministerial press officers eager to protect their minister’s reputation.
Above their article in Monday’s online edition revealing the contents of the report, the Telegraph’s journalists wrote “Adrian Beecroft’s report lays bare the breadth of the revolution in employment law which was being considered by close aides to David Cameron last Autumn – and the degree to which the Liberal Democrats in the Coalition ensured that only a pale shadow of his proposals never (sic) saw the light of day” (emphasis added).
Rather than take at face value claims by Lib Dem ministers to have ensured that only “a pale shadow” of Beecroft is being implemented, journalists should have gone further and checked what proposals the Coalition is actually making for employment law.
Had they done so, anyone following the police debates, would have pointed out to them that almost all the areas for “reform” identified by Beecroft are subject to either public consultation or proposed changes.
In particular, while Vince Cable has been all over the press saying that his department will drop Mr Beecroft’s proposals for Compensated No Fault Dismissals (CNFD), the policy remains subject to a public call for evidence which has not closed.
Moreover, a careful comparison of Mr Beecroft’s proposals and Mr Cable’s shows that while the former’s proposals would represent a significant tipping of employment law in favour of employers, Mr Cable’s actually go further.
• Beecroft says CNFD should be used only for capability dismissals, Cable’s proposals do nothing to restrict the set of dismissals coming within CNFD (making it potentially available to employers as a cheap alternative to redundancy).
• Beecroft says CNFD dismissals should attract the statutory redundancy payments, Cable asks whether there should be a cap to CNFD awards, putting them below redundancy payments.
Since Monday, we have had further clarity as to the government’s proposals for Employment Law reform. In particular part 2 of a draft Enterprise and Regulatory Reform Bill has now been published, no doubt to be known in future as “ERR” or “the Beecroft Bill”.
While the final version of the Bill may be very different from this draft (which makes no mention, for example, of the Coalition’s signature plans to introduce punitive fees for Tribunal Claimants), revealingly the Bill outlines one significant change (which was not in any versions of Beecroft, not has it been subject to public consultation in any form). This is to give Ministers the power in future, with no effective parliamentary scrutiny, to make Regulations limiting the compensatory award for unfair dismissals to a maximum of between 1 and 3 times the median wage (i.e. c£26,000-£78,000 in today’s money).
The maximum compensatory award is presently £72,300. No one should have any doubt that if this proposal is introduced, ministers will reduce this to the lowest amount in their power, namely c£26,000.
Beecroft, for all his faults, had a very different proposal. He suggested that the compensatory award for unfair dismissal should be set at a fixed amount of (say) 9 months wages. He recognised that this might cause injustice in some cases (if workers actually took longer than 9 months to find a job), but would have an advantage in that parties would know the value of a claim, and would – on both sides – find it much easier to settle.
Ironically, given that the general tenor of the Beecroft proposals was to benefit capital at the expense of labout, if this was introduced, this part of the Beecroft proposals would benefit many workers. As I have explained elsewhere, the median award for unfair dismissal (including both the basic and the compensatory award) is presently £4,591, or just over 2 months wages. Beecroft’s proposal would have the effect that the average unfair dismissal claims would attract around 4-5 times as much compensation as they do now.
Cable’s counter-proposal, unlike Beecroft’s offers “no minimum floor” for workers.
Rather, all it does, is reduce the value of workers’ claims.
So, when the Telegraph’s journalists announced that Liberal Democrats had removed all but a shadow of the Beecroft proposals, what they should properly have gone on to explain, is that the Lib Dems had done so only by pushing an already nasty package of reforms very dramatically further in the employer’s favour.