The Beecroft Report: A Financier’s Dream

by David Renton

Employment barrister and author David Renton on the proposed changes to employment law contained in the Government's controversial Beecroft Report.

First published: 22 May, 2012 | Category: Economy, Employment & Welfare, Politics

Reading the details of the Adrian Beecroft Report, which has now been published on the Daily Telegraph's website, what strikes me is really how few surprises there are. The report anticipates – wholly unsurprisingly – most of the malign ‘reforms’ of employment law on which the government has since been consulting.

The Telegraph has reported that the government has backed off from the worst of the Beecroft proposals, and attributes its benevolence to the intervention of Liberal Democrats in the cabinet. In some cases this might even be true. The document reads most of all like a rich financiers' dream of a Bolshevik revolution in reverse. Imagine: if, by waving a magic wand, the Coalition could undo every employment law reform of the past 40 years, what would be left?

Beecroft had been shown ministers plans, which were not then in the public domain, to introduce fees for Tribunals. These proposals were already punitive, since in future workers will pay dramatically more to bring a Tribunal claim than they would in any other legal jurisdiction, and they make workers solely responsible for paying the costs of Tribunal litigation (employers, the ones with the deep pockets, will pay nothing). Beecroft was dissatisfied that the government's proposals did not go far enough. Grasping that most claims are brought by dismissed former employees, he proposed that full fees should be required not merely if the claimant still had a salary but even if the worker possessed any wealth (i.e. a mortgage or any savings) – he predicted that without this reform workers will have their fees waived in about 60% of claims, but with his adjustment the proportion eligible for fee waiver could be as little as 10%.

Beecroft's wheeze, to deal with the ‘problem’ of discrimination law would be to abolish the current statutory regime under which an employer is usually liable for the acts of their workers, in particular harassment. This is the sort of scheme a government comes up with if you ask people who don't know any law to rewrite the law books for you. In harassment cases, employers can already invoke a statutory defence to the effect that they have taken all reasonable steps to discourage the harassment and should not be held responsible for it. In practice, the defence almost never works because generally the worker complains to the employer first about harassment and generally the employer does nothing about the complaint. The reason why these cases get to court is that the employer has not stopped the harassment but has tolerated it. Because employers are so often complicit, the employer will inevitably be in the dock, whatever the phrasing of the law.

Beecroft focuses on TUPE and collective redundancies, and in both cases the government is now consulting on (albeit subtly different) reforms intended to reduce workers rights in these spheres.  And there are also some proposals intended to increase the employment of children, which reminded me of nothing so much as the primary history classes I attended on how the good (clearly too good) Victorian Parliaments had ended the abuse of children working in factories.

What is more worrying, and contrary to the spin that the Telegraph is putting on Beecroft, is that in certain key cases, the Coalition's plans go further than anything Beecroft lobbied for.

Take ‘compensated no fault dismissals’ (CNFD).  This is the Coalition's proposal to remove most workers in companies of fewer than ten employees from the unfair dismissal system, and to renegotiate the present redundancy system down, from the present reality where workers with long service can be entitled to anything up to six months' wages on dismissal, replacing it with a new cap.  The cap is still to be determined (and subject to consultation) but could possibly be as low as four or six weeks' wages.

Beecroft's proposal for CNFD, to give all workers dismissed for a reason other than misconduct the present redundancy payments, but prohibit them from taking their case further, though nasty enough (this would prevent workers bringing claims for an unwanted retirement or an unfair capability dismissal), is actually considerably milder than the scheme on which a Lib Dem Business Secretary has since been consulting.

Finally, the report is characterised by large passages of the pure business ‘puff’ that passes in such circles for economic analysis. ‘Britain has a deficit crisis, from which the only escape route is economic growth.’ Fantastic, so why is the government so desperate to wreak cuts on the public sector?

‘Employment law and regulations ... deters small business in particular from wanting to take on mere employees’. So why is that only 1 in 100 businesses, when asked what stops them taking on new staff, raises the problems of employment law?

There is no real rationale behind the report other than a certain sentiment that the working poor are not poor enough, while the very rich too need to see their wealth further inflated. 

And this takes me to the real scandal of the report. Mr Beecroft is neither a lawyer, nor in any way known for having commented before on employment law, but a ‘venture capitalist’. He claims no expertise to justify any of the ideas in his report. He was commissioned to write it for one reason and one reason only: in six years, he has given in excess of £500,000 to the Conservatives.

David Renton is a barrister at Garden Court chambers in London and appears regularly for claimants at Employment Tribunals. He writes on employment law for the Haldane Society of Socialist Lawyers and is the author of Struck Out: Why Employment Tribunals Fail Workers and What Can be Done.

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