THE BEECROFT REPORT – WHAT IS THE BUZZ ALL ABOUT?

The Beecroft report is currently making headlines due to the Business Secretary Vince Cable criticizing its content. However, what is the report and why is it so important.

The report carried out by venture capitalist Adrian Beecroft was commissioned by the Department for Business, Innovation and Skills (BIS) as part of the "Red Tape Challenge" to identify areas of employment law that could be improved or simplified in order to help businesses create jobs. It was actually published back in October 2011 but the Government was forced to publish its contents earlier than intended due to it being leaked to the newspapers.

The headlines have focused on the suggestion to bring in a no-fault dismissal but the report has dealt with many other aspects of employment law such as changing the consultation period for collective redundancies to 30 days from the current position of a 90 day consultation where more than 100 workers are to be dismissed. The report states that the 30 day consultation is currently only available for smaller firms, which means that larger firms have to pay people an extra 60 days worth of wages.

As for the proposal to introduce so-called “compensated no fault dismissal” this would allow businesses to dismiss unproductive workers without explanation by simply offering an enhanced leaving payment similar to a redundancy payment.

In March of this year, the Government launched a call for evidence on introducing these for micro-businesses i.e. those businesses with fewer than 10 employees. In its call for evidence, the Government proposed that these businesses should be able to dismiss an employee where no fault is identified on the worker's part, provided that the employer pays a set amount of compensation. The employee in turn would not be able to bring a claim of ordinary unfair dismissal. However, they could still bring claims of discrimination or automatic   unfair dismissal against the employer.

This is a controversial proposal and has been heavily criticised by many. Whether this sees the light of day will be interesting.

As for the recommendations we know the Government will not be implementing, they are:

- Exempting micro businesses from pensions auto-enrolment. The Government has delayed the implementation of pensions auto-enrolment for small employers. It has also stated that it will not be taking forward recommendations to exempt micro-businesses from various other employment laws, such as the right to request flexible working for those other than parents and carers.

- Not implementing the Agency Workers Regulations. These Regulations came into force on 1 October 2011. The UK was required to implement legislation bringing the Agency Workers Directive into force. The Government has stated that it will review the burden of paperwork associated with them next year.

- Legislate to ensure Polkey reduction in unfair dismissal cases applies to the basic award as well as compensatory award. The Government will not take this forward as there are already several reasons for which a basic award can be reduced.

- Simplify immigration law. The Government has stated that it is not planning to take this forward but it will keep it under review.

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Some of the report’s recommendations on simplifying employment law were submitted to the Government in October 2011 and are already part of proposed reforms such as the simplifying the system of tribunals and increasing fees for those taking unfair dismissal cases. The Government has also just launched a consultation on the repeal of third party harassment provisions contained in the Equality Act 2010 as recommended in the report. The Government called the harassment provisions unworkable and it hopes to publish a response toward the end of this year. Many other areas are still under discussion but either way “watch this space” as to how radical the reforms will be.

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