THANK YOU! This is so blindingly obvious and I’ve been waiting for someone to articulate this fallacy. Been driving me loopy…

If in doubt sack people. Same old Tories still no clue.

I await the numerous responses of “OMG!!! you’ve never read an economics textbook!!! Don’t you know that it is an iron law of economics that if you reduce the cost of employing people you get more employment!”

I have my reply to these predictable responses already written on the hard drive.

3. Planeshift

I have my reply to these predictable responses already written on the hard drive.

Perhaps you might like to spare us the wait and bring them out?

Because it is an iron law of economics that if you reduce the cost of employment, more people are employed.

I think the problem is one that the students and embryonic writers that assemble here are unlikely to come across.

There has been no lack of start ups in the New Labour period although their claims are absurdly inflated by counting those deemed self employed for tax purposes. The reason for this is that a small Company will pay virtually no tax and can quickly solve any insoluble employment dispute ‘informally’.
Small To Medium
The Services industry which demands little investment ,and IT has cut costs to very little allowing plenty of progress to be made without significant risk or investment.
Two types of start up are stuck. Those that require rapid capital investment and those that need to expand beyond “small” into “medium”. It is at this point that the regulatory demands and risks associated with employment take a step change and it is at this point the risks for the entrepreneur are largest often requiring profits to be forgone.
Crowded Out
All the time the Public Sector Neighbour is enjoying the same rewards without any of these problems and (amusing though it is) the suggestion here would be that having done all this the risk taker ought to form a mutual and hand the profits out to anyone for whom he has created employment, I digress but the crowding out issue cannot be ignored , small is,after all despised
Real World Business
We are talking , for the most part remember, not about people who have invented a laser robot inter-web omni -do export machine but those who wish to compete in established and UK based industries, introducing productivity incrementally .
Its all rather boring isn`t it no wonder scribblers know little about it and yet this is the UK Economy`s engine , its primary provider of employment growth and prosperity and this is the area that desperately needs the regulatory foot off its neck
Vested Interest
What Lib Con folk may not understand is that the 20% of large Companies positively love regulation which allows them to earn supernormal profits and protect their market positions .They already act ruthlessly to do so .

Reducing the risk associated with employment at small to medium levels is only part of the answer and there are no doubt down sides .However, there is no union for the unemployed and as welfare and public sector Greek jobs decline the government has top do something to help business mobility and that means removing employee rights that hold back growth and employment

Or is there another way , you tell me ?

“Because it is an iron law of economics that if you reduce the cost of employment, more people are employed.”

No, the literature on economics says that there is a trade off with employment protection in general. Some groups in the population benefit from it, others do not. the actual impact of employment protection laws in general also depends on wider factors like the welfare system.

But that is a general debate about wider employment protection for later.

My point is regarding the specific proposal to increase the qualifying period before you can claim for unfair dismissal from one year to two years. It is absurd to suggest this will any impact on hiring decisions whatsover – if we were talking about moving from an instant right to protection towards a system of a qualifying period then the conservatives might have a point. But this proposal will have no positive impact, and a great deal of negative impact once workers who get treated like shit start getting bullied out of jobs (there are social costs that result from firing people).

The problem is that conservatives are hearing “removing employment protection” and automatically concluding “good thing” without paying attention to what the actual proposal is. Concentrate on the actual proposal and tell me how it changes anything for a business in the decision they make on whether to hire someone?

A business that can’t decide within 1 year whether it has the right person for a job has bigger problems than simply the prospect of litigation.

Paul – you haven’t written anything about the actual proposal.

The biggest cost a business faces when recruiting somebody is paying an agency fee, or the costs of internally recruiting them (advertising, staff time to sift through applications and interviews etc). If you want a skilled and experienced worker you also face the cost of paying a higher salary to somebody in order to poach them from another job (as skilled and experienced candidates will probably be in employment). If you don’t then you can offer a lower wage (the amount depends on the welfare system) to somebody on the dole and reduce your costs that way.

None of these costs are related to legal regulations and employment protection. If we want to reduce these costs we’d be better off looking at how job centres could help match vacancies to workers, thus allowing the cost of an agency/internal recruitment to be bypassed as the state would effectively be doing it for them. (although the job centres would need a far more competent workforce for a start)

The plan was announced, like most other nasty policies, in a fundamentally dishonest way by claiming it was to prevent lazy workers from claiming unfair dismissal.

It of course is actually nothing of the sort because lazy workers do not currently have the right to claim unfair dismissal, because that is a fair reason for dismissal. The tribunal can only look at whether dismissal was within the range of responses open to a reasonable employer (Tesco Stores v Pryke), and not whether they think the dismissal was fair. This is not an onerous test for employers by an stretch and only protects against serious/completely unreasonable unfairness.

The trouble is, now it has been announced like that, more and more people will believe the myth that lazy people cannot be sacked and the cycle feeds on itself.

Something of a straw man post but the answer, as so often, is simple (when you think the issue through from first principles).

Employment is a voluntary arrangement entered into between two sides- the employer and the employee. The terms of the agreement form the fundamentals of a contract and this is usually written down and signed by both sides (indeed the government has prescribed that it must be).

At the point at which the arrangement is agreed, both sides expect to benefit from it and usually they do. But often, after a period of time, one or other side feels they could get better value for their money/labour, elsewhere.

The circumstances under which the contract may be broken, by either side, will have been written into the contract itself (period of notice etc) and will have formed a crucial aspect of the original arrangement. If these terms were not satisfactory to either side, they should not signed the contract.

So, please explain to me, how is a contract voluntarily entered into by two parties any business of the government?

What is the justification for the state to intervene in, or codify, this voluntary process?

I know that the response, in these parts, will be along the lines of workers needing protection from evil capitalists etc but, frankly, in the UK employment market in the 21st century that is nostalgic claptrap.

Of course, the balance of power between employer and potential employee will change according to the macro-economic climate. But that is no justification for any kind of employment law.

http://www.oecd.org/dataoecd/8/4/34846856.pdf

The net impact of EPL on aggregate unemployment is therefore ambiguous a priori, and can only be
resolved by empirical investigation. However, the numerous empirical studies of this issue
lead to conflicting results, and moreover their robustness has been questioned. On the
other hand, it is possible to detect a link between EPL and employment rates for specific
groups. Some studies, as well as the analysis presented in this chapter, suggest the
possibility of a negative link between strict EPL and the employment rates of youth and
prime-age women, while there may be positive links to the employment rates of other
groups. This is consistent with the above findings of the effects of EPL on labour market
dynamics. Indeed youth and prime-age women are more likely to be subject to entry
problems in the labour market than is the case with other groups, and they are therefore
likely to be disproportionately affected by the effects of EPL on firms’ hiring decisions.

Isn’t this high youth unemployment something we’re all supposed to be worried about atthe moment?

@9 Because that’s a highly libertarian political opinion that most people would not agree with. You could just as well say why is it the government’s business if someone defrauds you – after all, you will have consented in some sense? Presumably because that that should be unlawful. Likewise it is a legitimate opinion that there should be unlawful ways of doing business if they are exploitative, or violate people’s reasonable expectations.

Planeshift

You have not understood my point.Firstly ,you are wrong about agencies and costs These are things that are true of larger companies and may appear in your text books Small companies rarely recruit via agencies which would be absurdly expensive . They recruit through contacts as they do everything else.
As a company moves out of this this low cost and relatively low risk level into medium size the risks and costs suddenly mount
The risk factor is the key,not the cost,so much and the risks associated with acquiring immoveable costs in the future are the major factor in the decision whether to expand or satisfice
Countless small businessmen have told me the same story , the reward versus the risk is not good enough to justify expansion from small to medium and the result is this is we have endless one man bands, little partnerships , IT based ideas but the tender shoots hit a later of regulatory tarmac when they might become little trees.

Something has to be done about that step for ordinary business and loosening employment regulations is obviously a key part of that

@ Tom

it is a legitimate opinion that there should be unlawful ways of doing business if they are exploitative, or violate people’s reasonable expectations.

But who is better able to decide if the job offered is exploitative?

The government or the person who wants the job?

Go on Tim, tell us why the minimum wag is terrible as well.

pagar/9: Of course, the balance of power between employer and potential employee will change according to the macro-economic climate.

I take it then that you’re also against all forms of monopoly and cartel legislation, and happy for one single firm to theoretically own all production and services in all fields?

If not, why is it any business of the state what contracts between businesses and shareholders are entered into, if employee-employer contracts are explicitly out of scope?

If so, how do you stop the single business from exploiting its employees on a “you work for us on our terms or you don’t work at all” system? (Also, how do you stop that business then buying the government, and becoming the state, in a kind of reverse-communism?)

(Note that a cluster of businesses agreeing in a cartel to only grant employees certain rights, provided that there aren’t enough jobs available in non-cartel businesses to provide sufficient competition for employees, is an equivalent situation to a single mega-business from the employee perspective)

http://english.aljazeera.net/indepth/opinion/2011/10/201110197948847722.html

What is the justification for the state to intervene in, or codify, this voluntary process?

The involuntary process in which we were all forced to rescue a highly inefficient group of people who have proven themselves unable to allocate the resources that the market rightly should have taken off them.

If we had a free market for all I’d probably agree with you, but we don’t.

@ Pagar

‘So, please explain to me, how is a contract voluntarily entered into by two parties any business of the government?’

It is the business of the government to ensure that workers are not exploited by employers because the odds are stacked against workers – just as it is the business of the government to stop businesses from causing harmful pollution, misrepresenting their products, selling faulty/forged/stolen goods, putting their workers at risk, or indeed putting the entire economy at risk, etc.

This is very far from being nostalgic claptrap; rather it is a very necessary protection from the anti-social behaviour of companies. Indeed, the view that such rights should be abolished suggests a deluded and dangerous nostalgia for Victorian working practices.

But who is better able to decide if the job offered is exploitative?

The government or the person who wants the job?

A fair hearing.

It is indeed puzzling why it is only wrong to sack someone after two years.

We would regard this sort of thing as bizarre or outrageous in other situations:

“And at Winchester Crown Court today, a man accused of a string of burglaries was acquitted after he was able to demonstrate that they all took place over a period of less than two years!”

Tim,

The big irony is I actually read that report before writing this post. It’s a report on EPL generally, and the main type of EPL regulation mentioned in the report is the statutory redunancy. It’s conclusion is that some groups benefit and others don’t, and you also need to cosnider the welfare systems. It also notes that the UK has the lowest EPL in europe. Once again you’ve taken things from a report out of context, and are using it to try and win debating points.

It is also irrelevant to this debate. This is about the proposal to increase the qualifying time before somebody can claim unfair dismissal from 1 year to 2 years. My contention is that this is irrelevant in determining the hiring decisions of firms. So far none of you have disputed this, instead prefering to talk about general EPL – some of which I can concede will increase the cost of employment. In order to make the case in favour of this proposal you’ll probably need to do the following:

(1) demonstrate what the cost of employing somebody is, and how much the current law adds to it.
(2) Establish how much the cost of employing somebody will be reduced if we extend the qualifying period before you have the right to claim unfair dismissal from 1 year to 2 years (and then perhaps go into details of the alternative scenarios of raising it to 3,5 and 10 years, perhaps abolishing it)
(3) Calculate the resulting effects on employment levels for both the proposals and alternative scenarios.
(4) evaluate the impact such a change will have on the ability of firms to poach workers from other companies, given that a general conclusion of the OECD report is that removing protections makes workers in existing jobs more risk averse and this effects the labour market in a negative manner.

@ CIM

I take it then that you’re also against all forms of monopoly and cartel legislation, and happy for one single firm to theoretically own all production and services in all fields?

Not at all.

One of the few legitimate roles of government is to ensure free markets and cutting back on unnecessary legislation is part of doing that.

@DOTW

If we had a free market for all I’d probably agree with you, but we don’t.

So the solution is to regulate the market?

@DHOT

It is the business of the government to ensure that workers are not exploited by employers because the odds are stacked against workers

Nonsense.

Employers need workers to exactly the same extent that workers need jobs. That’s why they get together.

@ UK Liberty

A fair hearing.

So the “fair hearing” can decide that the job is exploitative and prohibit the transaction from taking place?

I get the UK bit but what about the Liberty?

pagar: “I know that the response, in these parts, will be along the lines of workers needing protection from evil capitalists etc but, frankly, in the UK employment market in the 21st century that is nostalgic claptrap.”

You seem to be implying these regulations aren’t required because employers are better people now and wouldn’t break them anyway – but the idea that employers would spend money on lobbying to remove a regulation, and then not take advantage of the removal of that regulation, is totally ridiculous.

Fact is it’s sometimes financially good for a company to be able to jettison perfectly good employees cheaply and for no reason (other than declining commercial demand for their services). Although economically efficient, this is unfair to the employee, which is why there are rules against it. The reason employers treat employees well is not because it’s the 21st century, but because the law says they must.

This proposed change from 1 year to 2 years is not about lazy or incompetant employees, but is about protecting lazy or incompetant employers and managers.

Any good employer or manager should be able to weed out any incompetant or lazy employees within a year, by proper use of probation, supervision and appraisal. Using these systems properly will mean that an employee undergoes monthly supervision to monitor work, an end of probation appraisal, and an appraisal before the end of each year. Any employees who do not perform as expected and fail to hit targets can be put through the disciplinary system and fired within that first year. I’ve seen this happen with good managers.

It is lazy or incompetant employers and managers who still have incompetants working for them after a year. These employees are losing their company money and productivity, and yet these employers are content to not monitor and assess their work force effectively, and make such poor use of the existing disciplinary procedure guidelines, that after a year they prefer to keep the poorly performing employee, rather than put them through the discplinary process and risk tribunal.

In my opinion, these employers deserve what that they get. Running a business is not just as simple as providing a service or making a product – it is also about proper management of the workforce – if you can’t do it properly, then don’t bother starting a business.

What the condems are doing is yet again giving breaks to the better off to the detriment of the less well off. While this is supposedly about giving these lazy employers an additional year to assess their employee’s performance, it also allows employers with other motives, an additional year to fire an employee for whatever reason they like, and not have to give a reason to the employee.

I’ve heard of people fired in their first year, just after their employer found out their political affiliations, religious beliefs, sexual orientation, that a woman was planning on having 4 children starting in the next few years and because the manager just didn’t like the guy. And I expect that this is the tip of the iceberg. This will also just give employers and managers an additional year to get rid of employees performing well for their own twisted reasons. Or to control employees with poor conditions and work practices with the threat ‘I can get rid of you for no reason in the first two years, and there are people lining up to do your job’.

The power in this situation in a poor economy is already with the employer – few jobs and plenty of people to fill them. Giving more power to employers is weakening the employees already weak position further.

So, please explain to me, how is a contract voluntarily entered into by two parties any business of the government?

What is the justification for the state to intervene in, or codify, this voluntary process?

Remind me – how are contracts enforced again?

Unfair dismissal is, by definition, a breach of contract – that’s what makes it unfair. Even the most hard-core libertarians agree that it is the government’s business to regulate and administer contract law. You’re asking what business it is of the government if one party to a contract decides to breach it. Well, if that’s not the business of the government, I don’t know what is – the enforceability of contracts is the very foundation stone of both the market and our entire society.

So, please explain to me, how is a contract voluntarily entered into by two parties any business of the government?

What is the justification for the state to intervene in, or codify, this voluntary process?

Unfair dismissal is, by definition, a breach of contract – that’s what makes it unfair.

Do you really not agree that it is the business of government to ensure that contracts can be enforced?

>>>Because it is an iron law of economics that if you reduce the cost of employment, more people are employed.<<<

Bollocks! Workers are consumers too. If there is mass job insecurity because employers are allowed to sack people for sod all, then that will do nothing for consumer confidence.

Unfair dismissal is, by definition, a breach of contract – that’s what makes it unfair. Even the most hard-core libertarians agree that it is the government’s business to regulate and administer contract law.

Contract law is administered by the courts.

So it is perfectly possible for a term to be included in a contract of employment that is superseded by statute or vice versa.

Thus, if my contract of employment states that I will be employed for a minimum of five years and you dismiss me after six months, I can sue you for breach of contract (and the outstanding salary) regardless of the fact that the statute offers me no protection for unfair dismissal until I have been employed for a year.

Indeed, one of the reasons we have a culture where potential employees do not look more carefully at what they sign up to is that they lazily rely on the assumption that employment legislation will protect them.

@ 25 Dunc

“Unfair dismissal is, by definition, a breach of contract – that’s what makes it unfair.”

Honest question – if that’s the case, what term is used if someone is fired for being the “wrong” race, or because the boss doesn’t like their face, or for refusing a senior employee’s sexual advances etc?

@ 27 pagar

“Indeed, one of the reasons we have a culture where potential employees do not look more carefully at what they sign up to is that they lazily rely on the assumption that employment legislation will protect them.”

Maybe, but I’d suggest that a far bigger reason is that people don’t feel powerful enough to restrict their employment options by either attempting to negotiate contract terms or refusing jobs that don’t have contracts they consider perfectly fair. When you’re looking for work, it tends to feel like you’re in a buyer’s market.

As such, without legislation employers could probably get away with terms like “You hereby agree that our safety policies are acceptable and waive your right to sue if a machine rips your arm off”, or “You may be expected to work unpaid overtime, and refusing will be treated as misconduct, but it probably won’t happen much, we promise”, or “you will wear skimpy outfits if we suddenly decide that we want you to”. Which is why we need legislation in the first place; people relying on it might only show that’s it’s working.

So someone enlighten me;

A worker and his employer sign a contract of employement.

The wroker can at any time go and get another job, but the employer isn’t allowed to replace his employee?

Seems rather unequal, doesn’t it?

Tyler

Yes, there is inequality but not what you think. Reread the excellent post at 23.

@ 30 Tyler

“The wroker can at any time go and get another job, but the employer isn’t allowed to replace his employee?

Seems rather unequal, doesn’t it?”

Yes, if you deliberately ignore the fact that the employer is likely to be far more powerful than the employee to start with. If I get sacked today, I MIGHT get another job in good time, but I might also end up unemployed for long enough to have to sell all my stuff, lose my house and (unlikely but possible) end up on the street. If I quit tomorrow, my employer replaces me with a few weeks’ lost productivity at worst.

And if employers are allowed to sack people for any reason they like, they can hold that power over you in a way that just doesn’t happen in reverse (at least without effective unions). Got a problem with the obvious discrimination/bullying/harrassment/exploitation going on in the workplace? Better keep your mouth shut if you don’t want to lose your job!

Not so long ago, employers got together to blacklist people simply for spreading political beliefs that worked against corporate interests. We used to have an “equal” system, and employers exploited it callously. Hence employment laws.

Honest question – if that’s the case, what term is used if someone is fired for being the “wrong” race, or because the boss doesn’t like their face, or for refusing a senior employee’s sexual advances etc?</blockquote

You'd probably need to ask a lawyer for the technical answer, but I believe that would automatically be unfair dismissal – the breach being of your statutory employment rights, which form part of the implied terms of all employment contracts. See: http://www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/DG_10026692

So someone enlighten me;

A worker and his employer sign a contract of employement.

The wroker can at any time go and get another job, but the employer isn’t allowed to replace his employee?

Of course the employer is allowed to replace the employee. They just have to do it in a fair manner – i.e. in accordance with the terms of the contract (including implied terms) and the employees statutory rights.

Oh, and the employee usually can’t leave “at any time” without incurring penalties. I’ve never heard of an employment contract that didn’t specify a notice period for termination. If you just decide not to turn up, you can usually kiss goodbye to your last month’s pay.

I’m starting to suspect that some people around here have never actually had a job…

“The wroker can at any time go and get another job, but the employer isn’t allowed to replace his employee? ”

It’s not uncommon in some industries for some contracts to specify you are not allowed to work for a rival within 12 months of leaving your position.

@ 33 Dunc

“You’d probably need to ask a lawyer for the technical answer, but I believe that would automatically be unfair dismissal – the breach being of your statutory employment rights, which form part of the implied terms of all employment contracts.”

Okay, but you’re shifting the goalposts a bit there. If you’re talking about “implied terms” it’s misleading to say something is “by definition a breach of contract” – that makes it sound like unfair dismissal is limited to enforcing terms actually spelled out in the contract itself, e.g. if someone is fired without being given the agreed notice period, or being paid for work already done.

f you’re talking about “implied terms” it’s misleading to say something is “by definition a breach of contract” – that makes it sound like unfair dismissal is limited to enforcing terms actually spelled out in the contract itself

Only if you don’t understand the basics of contract law. All contracts have implied terms. For example, nobody bothers to explicitly specify that a contract cannot require any party to commit a criminal act, because that’s one of the implied terms in all contracts. Similarly, a contract does not need to explicitly state that it cannot violate your statutory rights, because they’re statutory.

@ Planeshift

It’s not uncommon in some industries for some contracts to specify you are not allowed to work for a rival within 12 months of leaving your position.

Whilst that is quite a common line in many contracts and is designed to give valuable employees pause for thought before leaving, it has proved impossible to enforce as courts have always ruled it to represent “restraint of trade”.

And quite right too.

@ Chaise

Maybe, but I’d suggest that a far bigger reason is that people don’t feel powerful enough to restrict their employment options by either attempting to negotiate contract terms or refusing jobs that don’t have contracts they consider perfectly fair. When you’re looking for work, it tends to feel like you’re in a buyer’s market.

I do agree it can feel like that, particularly if you are unemployed during a recession and, in these circumstances, you may just have to take what you can get. But most jobs are filled by people already in employment and these have an excellent opportunity to negotiate a contract according to their perceived value.

Usually this negotiation goes no further than salary and basic terms but there is no reason why minimum duration of employment, severance and other items should not be included.

Having said that, I do think that the obsession with security of employment is stultifying overall to the economy. We need a workforce that is confident and agile, not one that is stuck in a cul de sac because they’re afraid to leave it. To get that we need more jobs and less regulation.

Since this would take away what freedom of speech and action working class people currently have in their jobs, and work is one of the most important aspects of most people’s lives, this would constitute a bigger attack on liberty than anything Blair or Brown ever did.

@21.

So the solution is to regulate the market?

According to you; you want to pass a law to allow employers to be protected further still from bad decisions rather than having to deal with the consequences of their actions.

Then again your mob are all about externalization I suppose.

- legislation to enable sacking people unfairly needs to be done now, but reform of the banking system must wait until 2019? Are they trying to make the public angry?

@40 Not till 2019 eh? I bet the long grass will have hidden the matter by then.

Whilst that is quite a common line in many contracts and is designed to give valuable employees pause for thought before leaving, it has proved impossible to enforce as courts have always ruled it to represent “restraint of trade”.

And quite right too.

Not ion my experience, where is your evidence for that I know a few people who would love to know ?

Not in my experience, where is your evidence for that I know a few people who would love to know ?

Can you give me an example where a restraint of trade clause has been upheld by the courts?

Pagar’s

‘So, please explain to me, how is a contract voluntarily entered into by two parties any business of the government?’

To enact such a statement would involve repealing huge swathes of legislation. The legislation in place cuts both ways. An employee also has responsibilities to their employer which are implicit within the contract of employment, such as not running a competing business, or taking bribes.

Without this legislation employment contracts would become huge unwieldy documents. Could this not potentially increase the costs of employment rather than decrease them?

secondly Pagar’s assertion that

“But most jobs are filled by people already in employment and these have an excellent opportunity to negotiate a contract according to their perceived value.”

Would this not make hiring more difficult, complicated and costly? Each time an employer wants to hire a new employee it is preceded by a lengthy negotiation process, because EVERYTHING has to be specified in that contract.

Rather than legislation being an impediment to employment, does it not ease the employment of new employees?

I think Pagar’s generally correct, although I think a cut in employer NI would be a more direct way to achieve what this proposal aims at achieving.

To be honest what’s going on is the good ole fashioned Bait n Switch. They’ve started out with a premise that is not totally without merit, ie that should the burden of regulation and state bureaucracy be too high then it will negatively effect small and medium sized businesses thus stifling the economy. Given that the economy is currently stifled, mentioning this immediately gives the impression that it is so because of over regulation. With that groundwork firmly laid, the next breath moves onto a subject which has fuck all to do with over-regulation, but which is immediately accepted by the slow witted as being so, ie doubling the period in which an employer can completely ignore the terms and procedures of any employment contract they have signed when it comes to the dismissal of employees, with no consequences whatsoever.
One would think ensuring contracts are adhered to fairly by both parties would be outside the scope of ‘costly regulation’ and should in fact be a basic part of civil law. Well, by this proposal for two years you can guess again.

This is not a measure to fix the economy, it is simply raw, visceral class warfare at it’s most simplistic – the transferring of power from the Working class to the Bourgeoisie. The latter prefer it when the former have none at all. None for two years should suffice for the time being, no doubt.

There is a strong case for saying the disbenefits to employees of increasing the threshold from one year to two years exceed the benefits from the increase in employment that will be a side-effect of the change. There should be a debate about that.
However, Planeshift’s assertion however is ludicrous.
We live in uncertain times and businesses have difficulty in forecasting demand 11 months ahead let alone 23. If the cost of getting rid of a worker who is surplus to requirements after 18 months is greater than the net value to the business (not his/her wages, the net value to the business), then, unless it has a *guaranteed* level of demand for Year 2, the employer will choose not to hire the marginal worker. This is true whether it is a case of not filling a vacancy if it can scrape by with occasional overtime or handing a possibly temporary rise in demand that could be met in the short term by overtime or even turning down work which, combined with a cut-back in overtime would justify hiring someone for 18 months. We don’t need any rusty laws of economics, we just need to apply two brain cells.

@ Pagar =

“Having said that, I do think that the obsession with security of employment is stultifying overall to the economy. We need a workforce that is confident and agile, not one that is stuck in a cul de sac because they’re afraid to leave it. To get that we need more jobs and less regulation.”

You are calling for a cowed workforce on lower wages,.abused by employers who can fire anyone not sucking up at the drop of a hat. The UK system is positive arthritic because being fired is a major disaster! You are arguing that workers are no better than interchangeable beans.

Oh, and that they need to spend hundreds of pounds hiring a lawyer every time they want to take a job to review it for traps.

No, we need MORE regulation. We need a stronger safety net, for starters. The Nordic system shows the way!

(Oh, and restraint of trade is part of the legislation you’d abolish)

@30 – Person vs Legal Fiction. Hmm! Thanks for making clear that the legal fiction takes precedent in your view.

“the cost of getting rid of a worker who is surplus to requirements after 18 months is greater than the net value to the business (not his/her wages, the net value to the business), then, unless it has a *guaranteed* level of demand for Year 2, the employer will choose not to hire the marginal worker. ”

No business ever has a guaranteed level of demand. In the above scenario a business will probably use a temp.

Either way changing the qualification period before a worker gets protected from unfair dismissal from 1 year to 2 years is irrelevant to the above scenario. The factor relevant here is statutory redundancy pay – .ie. the business isn’t sure whether they will be able to employ the worker in year 2, and assuming they can’t get a temp (unlikely in the current job market), they then calculate the cost of making somebody redundant set against the risk that they will have to let the person go, and make their decision. Even then lowering the cost of redundancy is a small gain for the business and likely to be a marginal factor – the cost of salary, NI, etc over the 18 month period will be a far bigger part of any cost/benefit analysis.

“Having said that, I do think that the obsession with security of employment is stultifying overall to the economy. We need a workforce that is confident and agile”

And this proposal of the government actually achieves the opposite. We already know that workers are risk averse, preferring to stick with secure jobs than take a risk on a new one unless the salary is higher. Removing the right to not be unfairly dismissed means a worker is far more likely to stay in a place where he knows the boss is fair, the job is reasonably secure, and if the worst comes to the worst, he has a few years redundancy pay. A new job always means the possibility of having an asshole for a boss, who may dismiss you for no good reason. At the moment you have to survive a year before you at least get the protection against unfair dismissal. Doubling that to 2 years will mean even fewer workers taking risks.

If you want a more dynamic workforce willing to move jobs frequently then you need to have protections against unfair dismissal from day 1 (obviously you can still be fired if you are not up to the job). Against that we need to remove statutory redundancy payments (or better – get the welfare system to perform the function of paying upfront for re-training and adjustments), which will both make workers more willing to take a risk and reduce the potential cost of redundancy to employers (hence in John 77′s scenario shift the calculations marginally towards recruiting somebody).

Although on the other hand firms will then have to start to consider how to keep good employees loyal, which will increase the cost of employment for jobs where you need a long term commitment.

There are plenty ways where over-regulation does stifle the economy and by extension reduce labour demand. However, I think that it is stretching things to say that this issue is reducing labour demand. It must have marginal effects, but I do not think that they are significant. The UK has the 8th most flexible labour market in the world and we will not be moving towards the Europeans model because they are trying to move towards the UK model. We could aim for 1st, but changes have less effects the more flexible you are to begin with. Why a business can’t work out someone is useless after a few months is beyond me.

Businesses are currently more concerned about getting decent workers with the right skills in the first place never mind worrying about when they can sack them. They would just like to be able to find them. In the midst of high unemployment the country is awash with firms who can’t fill specialised skilled positions. That mismatch of skills might not be the only reason but it is a factor in reducing demand. For example, the firm can’t find the right engineering and IT workers and they can’t grow, thus they reduce their demand for all the other ancillary workers. Higher unemployment and lower demand throughout the economy. There are far too many arts graduates, virtually unemployable long-term unemployed and not enough engineers and IT professionals. These proposals are just skirting around the edges that will not do much to increase employment.

“There are far too many arts graduates, virtually unemployable long-term unemployed and not enough engineers and IT professionals”

And guess what? Engineering and IT courses are going to be closing. Too expensive to run!
Moreover, if the economy hadn’t been hammered by your party’s Austerity, then we’d have already returned to the very low levels of long-term unemployed seen over the previous decade…

@ Planeshift – Exactly!

Mr Leon, I don’t have a party. Voted for the Liberal candidate at the last election and she is not part of the government.

@53 – Then prove it by deviating from a hard-line Tory economic line.

There are far too many arts graduates, virtually unemployable long-term unemployed and not enough engineers and IT professionals. These proposals are just skirting around the edges that will not do much to increase employment.

Ah the good old ‘IT skills gap’ aka – “we can’t find one employee to do the job of three for 20% of the market price, quick, ring the cbi.”

6. Planeshift

No, the literature on economics says that there is a trade off with employment protection in general. Some groups in the population benefit from it, others do not. the actual impact of employment protection laws in general also depends on wider factors like the welfare system.

Given you said you had reams of evidence on your hard drive ready to go, I am a little underwhelmed by this. It is not much of an argument is it?

My point is regarding the specific proposal to increase the qualifying period before you can claim for unfair dismissal from one year to two years. It is absurd to suggest this will any impact on hiring decisions whatsover

It won’t have much of an impact but it will have some.

But this proposal will have no positive impact, and a great deal of negative impact once workers who get treated like shit start getting bullied out of jobs (there are social costs that result from firing people).

You want people to be stuck in jobs where they are bullied? But wait, if they can be fired, they won’t be bullied. What you are calling for is a system that only encourages work places to bully workers to make them want to quit. How can you think that? There are costs to businesses, but I am not sure there are social costs to society as a whole. But if there are, there are also social benefits. Workers who know they can be fired provide better service than workers who don’t. Workers who have been fired are likely to learn a lesson of sorts. The problem with Britain is not enough people get fired, especially in the Civil Service, not that too many do.

Concentrate on the actual proposal and tell me how it changes anything for a business in the decision they make on whether to hire someone?

I agree an extra year won’t amount to much. Which is why they ought to be allowed to fire anyone at any time, with or without good reason. That would have a better impact.

A business that can’t decide within 1 year whether it has the right person for a job has bigger problems than simply the prospect of litigation.

You assume a worker can’t fake it for a year. Or that their behaviour does not change once they know they are safe. Obviously both are true.

Planeshift

The biggest cost a business faces when recruiting somebody is paying an agency fee, or the costs of internally recruiting them (advertising, staff time to sift through applications and interviews etc).

For a big business. For most small businesses, this is absurd. It does not work that way. Even for most medium businesses it does not. Indeed big companies usually have to use agencies or create a special HR department precisely due to the absurd costs legislation forces on them. They can afford these costs, but they keep medium and small businesses from becoming bigger. That is not good.

None of these costs are related to legal regulations and employment protection.

But they are. Because of legislation and discrimination laws, companies have to generate a paper trail when it comes to hiring. They have to be able to show how and why they made their decisions. I have been on committees where we started with the paper work and then did interviews and then hired the person we were going to hire from the start. All a waste of time and money. All due to these sort of stupid regulations. They make everyone dishonest.

Tom (iow)

It of course is actually nothing of the sort because lazy workers do not currently have the right to claim unfair dismissal, because that is a fair reason for dismissal. The tribunal can only look at whether dismissal was within the range of responses open to a reasonable employer (Tesco Stores v Pryke), and not whether they think the dismissal was fair. This is not an onerous test for employers by an stretch and only protects against serious/completely unreasonable unfairness.

A lawyer I am guessing? Of course they have a right to claim whatever they like. They may not win, but they can and do claim. The system is like the lottery so they are in with a chance anyway. It may not seem onerous to you but that is because, I would assume, you are a lawyer. Most people hate the idea of going to Court – even these dinky little tribunals. It is expensive and time consuming. That is why they usually pay people off. You are simply clueless when it comes to how ordinary people see this. Now big companies have dozens of lawyers to send. It is their meat and butter. But for a small company, it is a huge deal. The process is the punishment. It shouldn’t be.

“I agree an extra year won’t amount to much. Which is why they ought to be allowed to fire anyone at any time, with or without good reason. That would have a better impact.”

Right. You can work sixty hours, not forty, or you’re fired. Period. Oh hey, less jobs on the market!

Why do you hate this country’s workers?

And sure, you want to be able to hire the boss’s son with zero paperwork and pay him for his “valuable” time, while telling the other workers to take the minimum wage or fuck off, and the competition clause means no work for anyone else in the field for five years. Right.

“The process is the punishment. It shouldn’t be.”

That’s right. The punishment should be MASSIVELY more severe for things like not paying workers on time. The low levels of punishment for treating workers like shit are the problem. You want to make it *mandatory*, though. The duty to shareholders MANDATES a race to the bottom in your world.

Even America has a lot more protections than your proposed corperatist state.

@Dunc, Chaise:

“Unfair dismissal is, by definition, a breach of contract – that’s what makes it unfair.”

This is wrong. The employment protection legislation does not create implied terms in employment contracts; it enacts a series of non-optional statutory rights that give an employee an analogy to property rights in his/her job (so why the libertarians are against it I have no idea…). What makes unfair dismissal unfair is that the employer has not taken the job away from the employee in statutorily defined fair circumstances.

“Given you said you had reams of evidence on your hard drive ready to go, I am a little underwhelmed by this. It is not much of an argument is it?”

I said I had already written a reply to the predictable responses, which is different. Although thankfully many of those responses didn’t materialise.

“It won’t have much of an impact but it will have some. ”

Go on then. Explain how much the cost of employing somebody will reduce by increasing the qualification period before you get protection from 1 year to 2 years will. If you can link to a paper that specifically addresses this proposal as well please….

The fact nobody else has done this – making general asserrtions about EPL is as far as it has gone – I think is illustrative. There are indeed some employment regulations that carry a cost to businesses, this isn’t one of them. If you want to reduce these costs at least identify the correct ones.

It seems as if all Cameron has to do to win the approval of some conservatives for an idea is to say “de-regulation” and you get a hard on before checking to see whether the actual proposal is sexy.

“You want people to be stuck in jobs where they are bullied? But wait, if they can be fired, they won’t be bullied. What you are calling for is a system that only encourages work places to bully workers to make them want to quit.”

No, because if you quit due to bullying you can claim for constructive dismissal (although I believe there is a qualifying period for that as well).

” The system is like the lottery so they are in with a chance anyway”

The solution to this is reforming the system to weed out vexatious claims and reduce legal fees. By definition vexatious litigants will simply find another thing to claim on if you remove leigitimate protection, such as claiming sexual harrasment or the boss assualted them. But nobody suggests (actually in your case I’m not sure) we would increase employment by allowing employers to punch their workers in the face. In any case, the reason so many companies settle out of court is they don’t want the publicity, it is cheaper than risking a tribunal, and many just want it to go away – its the same reason insurance companies settle personal injury claims without investigating. The correct and effective solution is to devise ways of preventing and weeding vexatious and fraudalant claims in the first place before a defending party incurs a cost.

You wouldn’t propose to reduce the costs of personal injury claims to the car insurance industry by abolishing the right of people injured in accidents to make a claim for losses against those who caused the accident would you? You’d seek to find ways of weeding out people trying it on.

“The UK has the 8th most flexible labour market in the world and we will not be moving towards the Europeans model because they are trying to move towards the UK model. We could aim for 1st, but changes have less effects the more flexible you are to begin with.”

This.

The economists amongst you may recognise this as the law of diminishing returns.

There are far better ways of improving employment than trying to get the last drops out of the de-regulation bottle. Improve skill levels, education, change the welfare system to one that helps not hinders people etc.

59. Planeshift

Explain how much the cost of employing somebody will reduce by increasing the qualification period before you get protection from 1 year to 2 years will.

They will get two years out of people pretending to want to work. They will have longer before signs of disruptive behaviour begin to manifest. Assuming people are struck down at random by problems that make them less productive workers, they will have longer to weed these people out.

The solution to this is reforming the system to weed out vexatious claims and reduce legal fees.

Well that is not going to happen. If Parliament could, it would. The entire legal profession has a vested interest in manufacturing as many claims as possible so they won’t help. I am not sure reducing legal fees will either. It may just act to encourage more people to sue.

By definition vexatious litigants will simply find another thing to claim on if you remove leigitimate protection, such as claiming sexual harrasment or the boss assualted them.

Assault ought to go through a criminal process first. Nor should any sane civil system award damages without witnesses. But I don’t see any need for sexual harassment laws either. We need to reduce the number of pointless legal suits.

In any case, the reason so many companies settle out of court is they don’t want the publicity, it is cheaper than risking a tribunal, and many just want it to go away – its the same reason insurance companies settle personal injury claims without investigating.

That is true of big companies. It is less true of small ones. They can’t afford it.

The correct and effective solution is to devise ways of preventing and weeding vexatious and fraudalant claims in the first place before a defending party incurs a cost.

In so far as we can. A good way is to remove pointless laws like Unfair dismissal. Totally. All together. There is no need for such laws.

You wouldn’t propose to reduce the costs of personal injury claims to the car insurance industry by abolishing the right of people injured in accidents to make a claim for losses against those who caused the accident would you? You’d seek to find ways of weeding out people trying it on.

No but I might prohibit them from claiming mental anguish or any other non-provable mental illness. I might insist on tougher links between their claimed injury and the accident. You know, undo all the reforms carried out to help ambulance chasers.

Planeshift

There are far better ways of improving employment than trying to get the last drops out of the de-regulation bottle. Improve skill levels, education, change the welfare system to one that helps not hinders people etc.

Theoretically. We can’t improve skill levels because we can’t improve education. We can’t improve education without confronting the Educational Unions which would be a bigger battle than the Coal Miners’ Strike. It ain’t going to happen. They are working on reforming the welfare system. With luck we will copy some place like Denmark. But this comes down to the bottom line – this is a cheap and simple reform. As it won’t do much, it won’t be resisted much. It is a cheap and I assume cynical gesture. No more. But still mildly beneficial.

What I find very short-sighted and distressing is the tendency amongst right wing commentators to assume that people are only motivated by fear.

Workers will only work hard if they are frightened that they will get the sack. People won’t commit crimes if they are frightened of the punishment.

I have in the past worked in SME’s, and I have friends who work in SME’s. The best bosses to work for were the ones that were strict, (they set clear expectations for their employees), they were fair (they applied those expectations equally across all their employees), and they looked after their employees welfare (they would listen to your problems and get them sorted). In my and my friends experience such managers do not inspire fear, rather they inspire respect and loyalty.

Jobs in which you are afraid of your manager, because he/she is an arsehole (that is a technical term) do not inspire highly productive workers. Instead workers are more likely to be sick, staff turnover is higher, and they spend more time working the system. Creating legislation that allows your boss to be an even bigger arsehole, to be honest is counter productive.

Workers generally work hard not because they are afraid, but because they know what is expected of them, that expectation is reasonable, they are treated fairly, they are listened to by their managers, and they are looked after by the company they work for. Put those things in place and companies will not have problems either hiring or firing staff.

” But I don’t see any need for sexual harassment laws either”

Thank you, you’ve demonstrated how extreme your views really are. Exactly the reason David Cameron thought the conservative party needed de-toxification. If I was working for an opposition party I would keep all your quotes to use as a stick to beat him with about what grass roots conservatives would think.

@ 37 pagar

“I do agree it can feel like that, particularly if you are unemployed during a recession and, in these circumstances, you may just have to take what you can get. But most jobs are filled by people already in employment and these have an excellent opportunity to negotiate a contract according to their perceived value. ”

While those already in work are theoretically negotiating from a better position, the existing job can actually end up working against them.

I don’t know about you, but in most of the roles I’ve worked in, I haven’t actually seen my full contract until my first day of work (or later). Certainly I don’t remember it ever arriving along with the job offer, allowing me to peruse it before quitting my existing job.

As it happens, I’ve never personally been screwed over by this, but consider the scenario: you apply for a new job that appears to be more interesting, better-paid, and to offer better hours than your present one. You get an offer, accept it, and hand in your notice at your current job. Then the contract comes through and you find that the job description was euphemistic in the extreme, that the alleged rate of pay is actually performance-based, and that you will be expected to work regular night shifts and to take your holidays during the periods allocated to you by the company – none of which was mentioned in the recruitment process.

This would easily be enough to put you off the job and stick to your old one instead – but it’s too late, you already quit! Employers could probably get away with all of the above without falling foul of the law, and it demonstrates another way in which the balance of power allows firms to exploit individuals. If anything, we need stronger employment laws in this country, not weaker ones.

So Much For Subtlety’s

“They will get two years out of people pretending to want to work. They will have longer before signs of disruptive behaviour begin to manifest. Assuming people are struck down at random by problems that make them less productive workers, they will have longer to weed these people out.”

I find this statement highly amusing. I was unaware that the country was so full of people with such a mastery at disguise and deceit. I was also unaware that management in this country was so incompetent that they were unable to use the laws already at their disposal for dealing with employees who are disruptive. An employer altready has the right to set targets for poorly performing employees and to dismiss them if they fail to achieve those targets. What’s the matter? Are managers in this country too scared/incompetent to tell employees what is expected of them in their job, and to take action if they fail to achieve it? And yes sacking employees who are struck down by random problems such as suffering a personal bereavement, or needing hospital treatment, that is going to have a really beneficial effect on the morale of the other employees. I never knew that being a prize arsehole was an essential component of being a good manager.

@65
I used to work for a prized arsehole once. He did very well!
Surely if I had the power to fire someone who was mannerless, reads a tabloid newspaper and doesnt’t dress for dinner, I could hire a further two temporary workers thus doubling the number employed!

“I never knew that being a prize arsehole was an essential component of being a good manager.”

It’s certainly an essential component of being So Much For Subtlety.

@65 – “I never knew that being a prize arsehole was an essential component of being a good manager.”

You joke, but higher level management in Capitalist systems thrive on a lack of empathy.

@64 – Yea. *Currently*, the offer letter should set out everything you need to know. I’ve worked on the basis of such and never actually got a contract in several cases of contract work which were entirely satisfactory*. I’m puzzled why people want to end that.

(*I’ve been screwed over by non-payment, but as an employee in a normal job. TWICE.)

Employers could probably get away with all of the above without falling foul of the law

Well no. If employers deliberately mislead you as to the terms of your job (by misrepresenting the level of salary they intend to pay you) they’ll be guilty of misrepresentation – fraudulent misrepresentation at that.

@69 – And ALL that’s allowed is direct damages in those cases (and recession, but that’s not directly relevant in that in a right to fire world they can get rid of you anyway). In other words, it’s worth doing for companies.

Oh, and this graph is instructive as to how bad the situation is in the UK….

http://talkingpointsmemo.com/assets_c/2011/10/relativeincomemobility-cropped-proto-custom_28.jpg

We manage to be worse than AMERICA. But still too high for the right, and their calls for Right to Fire.

My comment was suppressed – why?
Was it too embarrassing to have your elementary error pointed out?

@72 – No, it’s not “suppressed”. The database on the site is taking quite some time in many cases to show new posts. Patience!

Oh, and hire a temp.

@ 73 Leon Wolfson
If I hired a temp I should be required to keep evidence of my Employer’s Liability Insurance for 40 years after I ceased to employ him/her. This would presumably mean that I should have to forego the option of cremation as it would need to be buried with me.

62. Mark Redwood

What I find very short-sighted and distressing is the tendency amongst right wing commentators to assume that people are only motivated by fear.

What I find very amusing is the tendency among the Left to make up motivations in their opponents that enables them to feel all nice and warm inside – a fantasy that presents them as so morally superior to the rest of us.

Workers will only work hard if they are frightened that they will get the sack. People won’t commit crimes if they are frightened of the punishment.

And yet we know that fear of both the sack and imprisonment is a necessary, if not complete, component of both the work ethic and law abiding. We can see this when law and order breaks down or whenever getting the sack is not really possible – if you don’t like the obvious examples of Britain’s schools and the NHS, try the former Soviet Union.

The best bosses to work for were the ones that were strict, (they set clear expectations for their employees), they were fair (they applied those expectations equally across all their employees), and they looked after their employees welfare (they would listen to your problems and get them sorted). In my and my friends experience such managers do not inspire fear, rather they inspire respect and loyalty.

Strict? So this has nothing to do with, you know, punishments like getting the sack? I would agree with you about what makes a good boss, but respect comes from firmness which needs to be backed up by sanctions. Like getting the sack. Deny bosses the right to sack workers and the respect goes out the window.

Jobs in which you are afraid of your manager, because he/she is an arsehole (that is a technical term) do not inspire highly productive workers. Instead workers are more likely to be sick, staff turnover is higher, and they spend more time working the system. Creating legislation that allows your boss to be an even bigger arsehole, to be honest is counter productive.

We have just seen that this is not true. Apple has lost Steve Jobs who was one of the biggest arseholes in Silicon Valley. A borderline psychopath I would think. Certainly one who made his workers very afraid of him. What do you know? Apple was high successful. Jobs got high levels of productivity out of his workers precisely because he was such a bully. Now I don’t recommend that model of management, but it worked in his case. You know, in the real world.

Planeshift

Thank you, you’ve demonstrated how extreme your views really are. Exactly the reason David Cameron thought the conservative party needed de-toxification. If I was working for an opposition party I would keep all your quotes to use as a stick to beat him with about what grass roots conservatives would think.

If there is a case for such laws I don’t know of it. I do notice you do not make one. I am not a grass roots conservative and have never voted for the Tories in my life. Keep what you like. I don’t see what use it will do you.

Mark Redwood

I find this statement highly amusing. I was unaware that the country was so full of people with such a mastery at disguise and deceit.

Well you need to get out more. Get a job in the private sector. Let us all know when you have some experience.

I was also unaware that management in this country was so incompetent that they were unable to use the laws already at their disposal for dealing with employees who are disruptive. An employer altready has the right to set targets for poorly performing employees and to dismiss them if they fail to achieve those targets.

Within reasonable limits. They do not have the right to simply sack someone for failing to perform. Especially if they are smart enough to allege some sort of special circumstance like mental illness. All of which adds to the costs. After all, if employers can sack people already, why do we need these laws?

Are managers in this country too scared/incompetent to tell employees what is expected of them in their job, and to take action if they fail to achieve it?

No. They simply know that there is a massive and expensive legal process waiting to come down on them like a ton of bricks. Or they work in the public sector in which case they are both too scared and too incompetent.

In reply for the second time to #49
Statutory Redundancy pay is not, repeat *not* the issue because the leaked document proposed permitting dismissal subject to paying basic redundancy pay. The cost to be avoided is that of employment tribunals and of the long procedure required before making anyone redundant including the side-effect paying him/her for weeks when there isn’t enough/any work for him/her to do.
Employers just don’t hire a temp for a year or eighteen months (and if they did, the temp would gain employee rights well before the year was up) – so that putting that as an alternative is risible.
May I suggest that you re-read my earlier post: the comparison that the potential employer has to make is not between the total cost of employment and the cost of making someone redundant but between the net profit to the employer from employing him/her (net value added less employment costs and associated overheads and, if the business is expanding the return required on the capital invested to equip him/her, whether it is a lathe or a computer or a desk and telephone) and the cost of making him/her redundant. Redundancy pay for a recent recruit is relatively trivial compared to the cost of going through the process to demonstrate that the dismissal is not unfair.

@74 – No, it would mean you’d need to cremate the temp with you. See, I can say stupid things as well. Get over yourself.

@75 – “And yet we know that fear of both the sack and imprisonment is a necessary, if not complete, component of both the work ethic and law abiding”

No, YOU know this. So do your Corporatist buddies. None of whom have any knowledge of the many studies which show fear depresses efficiency.

Jobs hired people for ENTHUSIASM. Not fear. You’re thinking of Stalin, your ideological friend in this.

“I am not a grass roots conservative and have never voted for the Tories in my lif”

Well no, the conservatives are far too namby-pamby for your neo-fascist, social darwinism ass. They don’t want to burn anyone alive who gets cancer, for example, as an efficiency measure.

Despite the spirited debate above, there is general consensus that the proposed change to allow employment protection legislation to apply after two years of employment rather than one will have a marginal impact, at best and is little more than tinkering around the edges.

That is surely true.

But whether or not you share my principled objection to government statute superseding private contractual arrangements (I’m betting not!!!) consider who actually benefits from employment law as it stands.

There are a number of departing employees who threaten action and extract a small pay off from there former employer.There are a few individuals who get through the tribunal system with a small pay off. There are a very few high profile individuals who get ludicrously high payments for discrimination from the court system.

But these benefits to a few individuals are utterly dwarfed by the cost of a vast army of employment lawyers and HR professionals whose whole raison d’etre is founded in these statutes. They foment inertia, and are a significant cost to both industry and the state.

And what do all these people all have in common? The answer is that they don’t produce anything or add value of any kind.

Most people now realise that our future prosperity is entirely dependent on our ability to compete in the world economy and that, to do that, we need to be lean and agile. And that means stripping out all the costs of people who don’t produce anything.

This is not a public sector/private sector point, there are many in the public sector who do produce for the economy. But there are also many in both sectors who don’t and the repeal of all employment legislation could have a major impact on economic regeneration.

That our government seems only interested in tinkering around the edges doesn’t inspire much hope for the future.

@pagar #71:

vast army of employment lawyers

Before we get onto the more general questions around the idea that there are people actually employed to protect the rights of employees from the employers who own the economic whip-hand; would you please provide statistics for this vast army?

Could you also present your case (and cost-benefit analysis) for your apparent claim that removing employee rights will increase their productivity?

@ 77 Leon Wolfson
Yes, but are you capable of saying sensible ones? For a self-employed individual the hassle of keeping records for forty years exceeds any benefit that one could get from hiring a temp for forty, let alone four, weeks. If I retire and downsize I can shred and recycle all my old paperwork after seven years – except my Certificate of Employer’s Liability Insurance.
Maybe you have never actually considered hiring a temp?

@ 69 TimJ

“Well no. If employers deliberately mislead you as to the terms of your job (by misrepresenting the level of salary they intend to pay you) they’ll be guilty of misrepresentation – fraudulent misrepresentation at that.”

Only if it can be framed as that. There’s such a thing as lying by omission: they might simply have failed to tell you that the hours can be antisocial, for example. Or see what I said about euphemism: the job description might be something like “Helping with customer relations and aiding them in their repayment goals”, where that actually means “Doing everything you can to squeeze money owed out of people who are being crippled by exploitative loan terms” – which might not be something you are happy to do.

Regarding pay, I agree that they can’t say you’ll get £20,000 and then pay you £10,000. But they might say “pay is partially commission-based” where “partially” means “80%”, or claim that you’ll earn “around” a certain figure but present an amount you’re unlikely to be able to earn.

@ 69 TimJ

…As an example of the above, I once had a job that was advertised as having “a small sales element”. The (long) training course was weighted to support this claim, focusing mainly on customer service and legal compliance. When I actually started the job I discovered that sales performance officially counted for 50% of your rating in performance assessments, and that in reality nobody gave a crap about the other 50%. The job was in effect focused almost entirely on sales, despite the claim in the advert.

Not the end of the world for me, but it meant that I’d taken a job that I never would have accepted had I been given an accurate description. I could easily imagine a similar trick being pulled with something that would have actively screwed me over, rather than just misselling me based on my working preferences.

@80 – I have those certificates sitting in £15/year storage. Where they will remain. Scream harder!

@78 – The alternative to tribunals is court cases.

Moreover, punishing people for being not paid, for instance, is ludicrous. Once more, I’ve been in a situation where I would literally not have been able to afford to bring a tribunal case against an employer, having just spent my reserves moving down the country and living for two months there without seeing a penny of pay!

What the debate above illustrates is how one-sided the employee-employer relationship can be. To argue that the relationship does not contain an imbalance of power involves framing the relationship in a particularly narrow way, such as…

‘So, please explain to me, how is a contract voluntarily entered into by two parties any business of the government?’

The key word here is voluntarily. Is this what happens? What if I had the power to write or amend my contract? Is this what happens? Or does my employer present me with a contract and tell me that I can take the job on condition I sign the contract? Does this contract tell me everything I need to know about the job? Clearly from the debate above it does not.

So Much for Subtlety response @75, illustrates for me how one-dimensional this line of argument is.

A manager can not have respect unless he has the ability to freely sanction his employees. Respect for a manager is a multifaceted relationship, one element is his ability to apply an effective sanction.

In So Much for Subtlety’s world it would appear that the ONLY reason I respect my boss is if I am afraid he/she will sack me if I fail to work hard enough. And again this argument flows through much right wing thinking that humans will only co-operate if they are frightened of the consequences. Lowest common denominator thinking again – people are motivated only by fear and greed.

In reality the reason why most people co-operate and work together, is because of something called shame. We learn shame from a very early age. Around 3 we begin to develop empathy for others, that is we start to understand another’s unique perspective, which opens the door to shame. When I experience that my actions can cause upset/harm to another my first reaction is feel shame. You can go and watch teachers & parents using shame inducing strategies with children. Essentially they start by promoting empathy – how what you did harmed another – and then wait for shame to appear – the child will drop it’s head.

Shame was very effectively used in Glasgow to tackle gang culture. Essentially what they did was to bring the rival groups into the courthouse and confront them with the harm that their actions caused, and simply waited for shame to appear.

If I switch off empathy, I also switch off shame. That is how I can harm another. That is how I can short sell a currency, and cause economic harm to millions of people – because I have sufficiently distanced myself from the harm that my actions have caused.

The above discusses just one aspect of motivation. My own experience suggests that human motivation is a highly multifaceted phenomenon.

@ 83
That supposedly clever comment merely demonstrates that you don’t know what you are talking about. That would more than double and, at the net of tax level, roughly quadruple the cost of the policy and mean that you needed to get c.150% of median work, while paying him/her median salary out of your temp, during the twelve weeks or less that he/she worked for you before acquiring employee rights. In a competitive environment that just doesn’t happen.
At most 10 of those years would tax deductible, the other 30 would come out of savings from work that has been taxed at 49% (40% tax and 9% class 4 NI contributions) so that’s effectively £1068 storage costs on top of £300 or so Employer’s Liability premium, add the 20% VAT (on wages Employer’s NI and agency fee) if you hire him/her through a temp agency or two weeks’ wages if you use a recruitment agency.