28th May 2012

Beecroft Report Published

In 2011, the Department for Business, Innovation and Skills (BIS) commissioned a report on employment law from Adrian Beecroft as part of the “red tape challenge”. The aim of the report was to consider ways in which employment laws could be amended in order to stimulate recruitment and growth.

The report previously caused controversy when excerpts from an unpublished draft were leaked to the media and indicated some far reaching proposals.  The final version of the report has now been officially published and includes the following proposed reforms of employment law:-

Unfair dismissal: The report includes a variety of alternate proposals, including scrapping unfair dismissal laws outright, raising the qualifying period, streamlining dismissal procedures under the Acas Code of Practice, changing the burden of proof and introducing a system of compensated no-fault dismissal for all businesses, whereby dismissal would automatically be fair if the employer had given full notice plus statutory redundancy pay.

Micro-business opt-outs: Businesses with fewer than 10 employees could opt out of a range of employment rights when hiring new employees, including unfair dismissal, pension auto-enrolment, flexible working and gangmaster licensing.

Harassment:  The report proposes that third-party harassment laws set out in the Equality Act, which make employers potentially liable for harassment of staff by third parties, should be abolished.

Retirement: The reports states that the decision to abolish the default retirement age should be reviewed.

Pensions auto-enrolment: Delay the auto-enrolment rules until the economy is stronger and exempt micro-businesses with fewer than five employees.

Work permits and immigration: Simplify the system including removing employers’ responsibility for checking the immigration status of workers.

In response, the government has published a note summarising the issues on which it has taken or is planning to take action, and those which will not be taken forward. In particular, it mentions that:

• It has already made calls for evidence in relation to a number of issues raised in the Beecroft report – including simplified dismissal procedures and compensated no-fault dismissals.
• The unfair dismissal qualifying period has already been raised to two years.
• The government is already planning to introduce fees for employment tribunals.
• A consultation on third-party harassment has just been launched.
• The government will review the impact of the removal of the default retirement age in 2016.