Chancellor’s remarks highlight business recruitment fears

Last Tuesday the Chancellor, George Osborne, delivered a speech to the Engineering Employers Federation’s Annual Dinner. During the speech he praised British manufacturing for its innovation and economic importance.

There was however one element of the speech, which has largely gone unnoticed by the media and it relates to unfair dismissal rights for new employees. The Chancellor, in his speech, argued that

 “We’re doubling the period before employees can claim unfair dismissal to two years and introducing fees to deter vexatious tribunal claims in the face of determined political opposition. Of course, employees have rights and should be protected. But what about you’re right to start a business and not be sued out of existence?”

This has shifted the Treasury, and by association the Government’s, position towards the proposals set out by Adam Beecroft in an internal report commissioned by Downing Street to investigate unfair dismissal and business productivity.

Extracts from the report, leaked last October to the Telegraph stated that;

 “unfair dismissal rules have made it… [harder] to dismiss unsatisfactory employees. [We see] a proportion of employees, secure in the knowledge that their employer will be reluctant to dismiss them,”

 The doubling of the period before employees can claim unfair dismissal has implications for the Government’s apprenticeship scheme. The Chancellor’s position will, if implemented, make recruiting apprentices more palatable for smaller organisations. The current rules for ending an apprenticeship state that

“if the employer wishes to end the apprenticeship early because there is sufficient evidence that there are capability or conduct issues that are substantial enough for the employer to conclude that there is no point in continuing with the scheme, then the early dismissal is capable of being fair.”

 The shift in legal status, as outlined by Beecroft and highlighted by the Chancellor, will help organisations who want to hire apprenticeships but are scared of recruiting a ‘lame duck’ candidate. Therefore these changes are likely to boost the recruitment of apprentices by giving assurances to companies that they will be free to move apprentices on if they are not up to the job whilst assuring would-be apprentices that their hard work and application will be reward