The Beecroft Report on employment law has been published by the Department for Business Innovation and Skills (BIS).
Business secretary Vince Cable said the report, which was written by venture capitalist Adrian Beecroft, has been published to dispel some of the myths that have been associated with it.
He added: “Because of ongoing interest, we reached a view that it is in the public interest to allow people to have access to its content.”
The report sets out the following recommendations:
- Employers with less than five employees should be excluded from auto-enrolment.
- Employers with between five and 10 employees should be given the right to opt out of auto-enrolment
- Employers with less than 10 employees should also be given the right to opt out of various current and potential regulations (if implemented), including flexible parental leave and the right to request flexible working arrangements.
- The introduction of part of the EU Institutions for Occupational Retirement Provision (IORP) Directive, which is due later in 2012 and will change the solvency rules for defined benefit (DB) pension plans, should be resisted.
- A simple, flexible way should be found to put together multiple pension pots.
- The impact of the removal of the default retirement age (DRA) on employers’ willingness to recruit older workers and on the overall effectiveness of the workforce should be closely monitored. If the impact is very negative, a DRA, probably at a higher age than was recently the case, should be introduced.
- The UK law should be changed to incorporate the concept inherent in the EU Directive that harmonisation of terms and conditions of transferred and original employees of the transferee organisation can be enforced after one year.
- The consultation period for collective redundancies should be 30 days, regardless of the number of employees to be made redundant.
Cable said: “The government has a duty to ensure the labour market provides economic and employment opportunities, and has therefore set out a parliament-long review of employment law.
“Beecroft came and spoke to officials in the Department for Business, Innovation and Skills last year while compiling his report. Consequently, the vast majority of proposals in the final report reflect ongoing work by the department.”
Read the full Beecroft report
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Beecroft’s Report on Employment Law highlights the requirement for growth and for productive workers to help to stimulate the economy.
There needs to be a balance between legislation that is in place to protect employees, yet at the same time does not prove a barrier to the overall growth of the business.
Beecroft’s recommendations include allowing smaller firms to opt out of auto-enrolment, scrap flexible parental leave and bring back the default retirement age (DRA).
However, many of these measures, such as providing employees with a pension and the ability to factor in busy lives around their work, actually help to improve employee motivation, which in turn can lead to increased productivity.
Although the timing of the release of the Beecroft report appears to be political, given that it was finalised last October, from an employment practitioners perspective, there are some interesting issues.
Many of the recommendations within the report are already either out for consultation, or the subject of a call for evidence.
What seems to be attracting most attention is the concept of no fault compensated dismissals for employers with fewer than 10 employees. The general consensus now seems to be that this proposal will be dropped once the call for evidence ends next month.
Even if this regime is implemented though, we doubt it would have the impact expected because: Discrimination claims would not fall within the no fault dismissal regime. An unintended consequence of this type of legislation would therefore be a proliferation of discrimination claims, as disgruntled employees look for other ways of making claims against their former employer, or extensive satellite litigation to determine what falls in and outside the scope of the new regime.
On another note, practically, the recommendations in Beecroft to amend TUPE to allow for the harmonisation of terms and conditions post-transfer would be very welcome from an employer’s perspective. This is currently the subject of a call for evidence, but given the EU provisions on business transfers, unfortunately we doubt that the government has much scope for dramatic change on this front.