The brief I’ve given myself in this blog is to look at employment law issues in the news and try to explain ‘what is really going on’. When it’s just a matter of the Telegraph or Daily Mail getting the detail of the law wrong that’s quite easy. With the Beecroft report, however, figuring out what is really going on is more tricky.
Having been away for the past few weeks I’m obviously coming to the story pretty late in the day. Lots of good stuff has been written about Beecroft and if you haven’t followed the story then you just need to check out Michael Carty’s blog for XpertHR.
For what its worth, I think the Beecroft report is an astonishingly slipshod and ‘slight’ piece of work. So much so, that I bet BIS are pretty embarrassed by it. In the introduction, Beecroft thanks BIS officials for all their help with the report. I suspect that what happened was that they tried to explain some of the issues to him, but he proved to be a poor student.
Time and again Beecroft explains an employment law issue in a way which shows that he has very little knowledge of what the law actually says or how it works. Take this suggestion from the section on unfair dismissal:
The burden of proof on the employer could be reduced, making it harder for the employee to claim to a tribunal that the process was flawed. Reducing the burden of proof would also address the problem of employees claiming that dismissal was for discriminatory reasons rather than performance reasons since if it is easier to prove that dismissal was for underperformance it is harder to say that it was for discriminatory reasons.
If you were marking the Beecroft report as an essay I think you’d write ‘see me’ next to that paragraph. Someone capable of writing about unfair dismissal in that way clearly has a very confused understanding of what the law says (what ‘burden of proof’ is he referring to?) and you would want to discuss with them whether they might not be better off studying something else.
Enjoyable though it is, however, it is simply too easy to run through the Beecroft report and point out all the legal howlers. Something more important is going on here. How did such a ropey piece of work gain such traction? Why was it commissioned and what purpose does it serve?
Its important to remember that the report was surely not meant for publication. If any part of the Government wanted a report critiquing current employment law and suggesting a more ‘free market’ way forward it would have been quite easy to come up with one. There is no shortage of people who actually know what they are talking about who could have done a very competent job.
Whatever Beecroft was intended to be, it wasn’t intended to be a serious analysis. It’s not the content of the report that matters because the content is obviously rubbish and no serious effort has gone into it.
We should see the Beecroft report in terms of its function within the Coalition. On employment law, the Conservatives and the Liberal Democrats have different starting points. The Conservative position is to be suspicious of any talk of rights and to believe that if business is freed to behave as it likes towards employees then that will benefit the economy, and ultimately the workers employed in it. The Lib Dem position is to be suspicious of unrestrained capitalism and more comfortable with the idea of the law protecting employees from unfair treatment.
Both coalition partners need to demonstrate that they are winning some ground for their way of thinking – and the Beecroft report facilitates that. The Conservatives can show that the Lib Dems do not have a lock on business policy despite Vince Cable being SoS. They can argue that radical thinking is going on behind the scenes and leak selected highlights to the Daily Telegraph. The Lib Dems, on the other hand, can claim to have blocked the notorious ‘no-fault dismissal’ idea showing that they are a restraining hand on the tiller. Then again, the Conservatives can quietly point out that most of Beecroft’s recommendations (many of which had been in the pipeline for some time anyway) are being followed up. Both sides gain something from the report.
Meanwhile, while all our attention is on the ‘no fault dismissal’ proposal, the Government quietly publishes a Bill paving the way for a dramatic reduction in unfair dismissal compensation. That attracts very little attention because Clause 12 of the Bill is expressed in pretty obscure terms, and because there is no actual proposal yet. In theory, a Secretary of State could use the new power to increase the current limit on a compensatory award. However it is much more likely, in the current climate, that the maximum compensation will be reduced – possibly by a significant amount. Anya Palmer has written in the Guardian about how important this provision is, but the rest of the press is happy to ignore the proposal. The fact is that the change is not ‘eye-catching’ enough to make good copy.
When a magician points to his right hand to show you it’s empty, you can be sure that he has something important hidden in his left. Whether it was originally intended this way or not, the Beecroft report is a piece of misdirection. Let’s not fall for it.
Re your penultimate paragraph, the extent to which a secretary of state could increase the present award is limited by the proposed multiple of 3 times median salary. The maximum compensatory award is currently £72,300. The median salary is £26,000 so the maximum to which it could be increased is £78,000. The choice of an upper limit so close to the existing limit leaves no room for doubt that the intention is to reduce the limit.
I don’t doubt the intention – but in theory…
Clause 12 says this:
‘(2)The limit as so varied may be—
(a)a specified amount, or
(b)a specified number multiplied by a week’s pay of the individual concerned,
or it may be the lower of those things.’
There is no upper limit to the number of weeks’ pay that could be specified under 12(2)(a).The limit may be the lower of two amounts but it doesn’t have to be – the ‘or’ is crucial.
As I read it the SoS could in theory say that the new limit is a week’s pay multiplied by 500. He wouldn’t of course, but i don’t see anything in the Bill to stop him. Have I missed something?
I mean 12(2)(b) of course!
You are right, of course. There is an upper limit to the amount that can be specified under 12(2)(a) but no upper limit to the number of weeks that can be specified under 12(2)(b). Clause 12(4) sets a range for the former at between 1 and 3 times median annual earnings. Clause 12(5) only sets a minimum of 52 for the number of weeks that can be specified under clause 12(2)(b) so this could in theory be 500. If both types of limit are set then a “lower of” provision also applies and so there would still be an upper limit of (at most) £78,000 at today’s values. A Secretary of State who wanted to increase the limit beyond present levels could in theory do so by setting no 12(2)(a) limit, just a 12(2)(b) limit of 500 weeks or more. But a Secretary of State who was so minded would probably just repeal this provision.
All of which shows how you can hide a story you don’t want the press to talk about. Just make it complicated enough that it takes a while to explain and the press stay clear.
I have no doubt at all that the Government are planning a reduction in the compensatory award but the Bill gives them enough cover to make it deniable – for now.
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