No fault dismissal plans face growing opposition

Challenges to the proposal come from Cable, Heseltine, and potentially the courts.

What will kickstart growth in the British economy? Well, apparently making it easier to sack people, if the government's policy moves are anything to go by. But plans to allow no fault dismissal for small companies appears to be a step too far, causing considerable discomfort both within the coalition and amongst the public.

Now, the Business Secretary Vince Cable has said he will work with Lord Heseltine, the Conservative former deputy prime minister, to block the bill.

The plans, proposed in a report by venture capitalist Adam Beecroft, would make it easier for firms to sack people without explanation, on the basis that this will encourage them to hire more people. While the Liberal Democrats are reportedly completely opposed to the idea, under strong pressure from Downing Street, Cable was forced to agree to a consultation on introducing the rule for small companies (of ten people or fewer).

While limiting the measure to micro-companies waters down Beecroft's original proposal, the logic is still flawed -- as self-made millionaire Heseltine argued on the Politics Show on Sunday:

When you start talking about enabling people to sack people, well, I have two observations. The first is this, the sort of companies that I understand don't sit there saying, "by golly, we've got to be able to get rid of people, so therefore we mustn't invest because the risks are too high". If you're really an enterprising business, you invest because you think it's going to be a success. You may have to readjust but you can do that, as quite obviously is happening right through industry as significant numbers of people are being laid off.

This intervention from Heseltine, a Tory party grandee who is currently advising Cameron and Nick Clegg on growth, adds weight to the argument and prevents it from being another Lib Dem/Tory spat -- as Cable has clearly noted. At the launch of the reform to employment law, the Business Secretary said:

There were some very helpful comments from Lord Heseltine, one of my very distinguished conservative predecessors, you know warning about the dangers of creating a fear of dismissal and I'm very responsive to the advice I get from him.

Meanwhile, the Times (£) reports today that yet another challenge to the bill could come through the courts. According to senior lawyers, women are more likely to work for small companies, so there is a case that this would amount to indirect gender discrimination.

While it is clear that this bill will not have an easy passage, it is worth remembering that although this is one of the most extreme, it is not the only move against workers' rights. A series of deregulatory measures are not being consulted on, as they have already been accepted by government. These include increasing the qualifying period for unfair dismissals from one year of employment to two, and requiring those who take their employer to industrial tribunals to pay an initial deposit of £250, and a further £1,000 is a hearing is granted.

It is difficult to see how, in this unstable economic climate, further eroding job security will have any beneficial effect.

 

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Unite stewards urge members to back Owen Smith

In a letter to Unite members, the officials have called for a vote for the longshot candidate.

29 Unite officials have broken ranks and thrown their weight behind Owen Smith’s longshot bid for the Labour leadership in an open letter to their members.

The officials serve as stewards, conveners and negotiators in Britain’s aerospace and shipbuilding industries, and are believed in part to be driven by Jeremy Corbyn’s longstanding opposition to the nuclear deterrent and defence spending more generally.

In the letter to Unite members, who are believed to have been signed up in large numbers to vote in the Labour leadership race, the stewards highlight Smith’s support for extra funding in the NHS and his vision for an industrial strategy.

Corbyn was endorsed by Unite, Labour's largest affliated union and the largest trades union in the country, following votes by Unite's ruling executive committee and policy conference. 

Although few expect the intervention to have a decisive role in the Labour leadership, regarded as a formality for Corbyn, the opposition of Unite workers in these industries may prove significant in Len McCluskey’s bid to be re-elected as general secretary of Unite.

 

The full letter is below:

Britain needs a Labour Government to defend jobs, industry and skills and to promote strong trade unions. As convenors and shop stewards in the manufacturing, defence, aerospace and energy sectors we believe that Owen Smith is the best candidate to lead the Labour Party in opposition and in government.

Owen has made clear his support for the industries we work in. He has spelt out his vision for an industrial strategy which supports great British businesses: investing in infrastructure, research and development, skills and training. He has set out ways to back British industry with new procurement rules to protect jobs and contracts from being outsourced to the lowest bidder. He has demanded a seat at the table during the Brexit negotiations to defend trade union and workers’ rights. Defending manufacturing jobs threatened by Brexit must be at the forefront of the negotiations. He has called for the final deal to be put to the British people via a second referendum or at a general election.

But Owen has also talked about the issues which affect our families and our communities. Investing £60 billion extra over 5 years in the NHS funded through new taxes on the wealthiest. Building 300,000 new homes a year over 5 years, half of which should be social housing. Investing in Sure Start schemes by scrapping the charitable status of private schools. That’s why we are backing Owen.

The Labour Party is at a crossroads. We cannot ignore reality – we need to be radical but we also need to be credible – capable of winning the support of the British people. We need an effective Opposition and we need a Labour Government to put policies into practice that will defend our members’ and their families’ interests. That’s why we are backing Owen.

Steve Hibbert, Convenor Rolls Royce, Derby
Howard Turner, Senior Steward, Walter Frank & Sons Limited
Danny Coleman, Branch Secretary, GE Aviation, Wales
Karl Daly, Deputy Convenor, Rolls Royce, Derby
Nigel Stott, Convenor, BASSA, British Airways
John Brough, Works Convenor, Rolls Royce, Barnoldswick
John Bennett, Site Convenor, Babcock Marine, Devonport, Plymouth
Kevin Langford, Mechanical Convenor, Babcock, Devonport, Plymouth
John McAllister, Convenor, Vector Aerospace Helicopter Services
Garry Andrews, Works Convenor, Rolls Royce, Sunderland
Steve Froggatt, Deputy Convenor, Rolls Royce, Derby
Jim McGivern, Convenor, Rolls Royce, Derby
Alan Bird, Chairman & Senior Rep, Rolls Royce, Derby
Raymond Duguid, Convenor, Babcock, Rosyth
Steve Duke, Senior Staff Rep, Rolls Royce, Barnoldswick
Paul Welsh, Works Convenor, Brush Electrical Machines, Loughborough
Bob Holmes, Manual Convenor, BAE Systems, Warton, Lancs
Simon Hemmings, Staff Convenor, Rolls Royce, Derby
Mick Forbes, Works Convenor, GKN, Birmingham
Ian Bestwick, Chief Negotiator, Rolls Royce Submarines, Derby
Mark Barron, Senior Staff Rep, Pallion, Sunderland
Ian Hodgkison, Chief Negotiator, PCO, Rolls Royce
Joe O’Gorman, Convenor, BAE Systems, Maritime Services, Portsmouth
Azza Samms, Manual Workers Convenor, BAE Systems Submarines, Barrow
Dave Thompson, Staff Convenor, BAE Systems Submarines, Barrow
Tim Griffiths, Convenor, BAE Systems Submarines, Barrow
Paul Blake, Convenor, Princess Yachts, Plymouth
Steve Jones, Convenor, Rolls Royce, Bristol
Colin Gosling, Senior Rep, Siemens Traffic Solutions, Poole

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.