Thursday, November 24, 2011

The myth of restrictive employment law

We've been told that employers want to hire, but are put off by restrictive employment legislation and the constant threat of tribunals. Oddly, when Vince Cable asked Britain's small businesses what was holding them back, just 6% cited employment legislation as an obstruction to hiring and this doesn't surprise me at all. I've worked for some very large British companies and for some small ones and whenever I've been involved with recruitment - and I have hired over 200 people in my career - we've discussed business needs and costs, but I have never, ever worried about whether we could get rid of the new employee. Indeed, I call as a witness, the noble Lord Heseltine, speaking on the Politics Show on Sunday 20th. 
"When you start talking about enabling people to sack people.... the sort of companies I understand don't sit there saying 'We've got to be able to get rid of people, so therefore we mustn't invest - the risks are too high.' If you're really an enterprising business, you invest because you think it is going to be a success. You might have to readjust, but you can do that"
Businesses hire because they need people to drive themselves forward and to grow. 

Vince has already promised to roll back the unfair dismissal eligibility to two years, just as it was in 1999 - as if that held growth back over subsequent years. It may be that this is simply a performance to allow the Liberal Democrats to demonstrate that they are restraining the worst excesses of the Conservative Party, but perhaps that is the best case scenario. 

It doesn't even make economic sense - a cowed workforce, scared for their jobs are hardly likely to consider moving house or buying the big ticket items that the economy needs us to buy. This is not a recipe for growth, nor will it create jobs. It will simply make more people unemployed and that is bad for those individuals, their families, their communities and our country. We can't afford these changes. 

If you have to get rid of an employee - and sometimes, that is the right thing to do - there is a process to ensure that you do it fairly and properly, in line with natural justice. It doesn't strike me as unreasonable to treat your colleagues as human beings, rather than as mechanistic resources. In fact, it seems to me to be the ethical and progressive way to behave. Look at the German model - their economy has done rather well, despite protection for employees and even the presence of employees on corporate remuneration committees.  

Show me the evidence that winding back our employment protection - protection that is hardly amongst the most stringent in the world - will generate growth or that employers are crying out for change and I might listen. Only might. 

To close, another reminder of the nous demonstrated by that renowned left-wing firebrand, Lord Heseltine. 
"you want to be very careful in political terms that you don't get the reputation that all you are trying to do is to make life rougher and tougher for large numbers of people who, in the end, you want to vote for you."

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