Opinion: Don't re-instate Beecroft

Malcolm Martin, managing director at Employer Solutions, takes on the IoD's plans for regulation reform.

Malcolm MartinThe magazine People Management reports that the Institute of Directors (IOD) has again called for employment law changes.

However, statutory employment law, which new law would mainly be, will not help. What has happened is that a body of case law that has built up in British and European courts and it makes simple principles immeasurably complicated.

Holidays, for example, should be easy for any employer to sort out. They are not. Civil servants and courts have colluded to make some situations so complicated (or vague) that only the courts can sort them out. That we will have to live with.

It is disappointing that the IoD wants to see more a no strike laws to clamp down on “militant trade unions”. Entering an unnecessary battle with the trade unions may be counter productive.

Furthermore the IoD is reviving the concept of ‘compensated no fault dismissals’ proposed by venture capitalist Adrian Beecroft.

This is neither needed nor particularly likely to work. What we have seen in the last twelve months is some important changes, such as the need for deposits before a tribunal claim and a more proactive approach to awarding costs. These should be given time to bed down as the effects could be dramatic.

The IoD also reports that nearly half of businesses think that regulation is holding them back. In employment that is a mis-conception. Employers who have and follow good procedures, are unlucky if they have to defend their actions. Apparently the IoD urges ministers to seize the opportunity to tackle these issues “head on”.

That is sad, because in my view there are far more important fish to fry. Better training for business owners, leaders and managers will help small businesses to survive, become medium sized businesses and grow.

For example, in Lancashire we have a world class management school, at Lancaster University, which is proactively engaging with businesses.

And, fortunately, the IoD is also putting its weight behind the Growth Accelerator programme which provides coaching support to small growing businesses. The IoD’s union-bashing and regulation blaming should be consigned to the bin.