Nick de Bois is the parliamentary candidate for Enfield North, the seat he also fought in 2001 and 2005. Father of four, Nick is also MD of Rapiergroup, an international marketing events company. Here he argues that Labour’s recent employment legislation is bad for employers and employees alike.
I suspect I’m not alone in being put in the position where I have had to make some redundancies as a result of the economic mess we find ourselves in. I would also be surprised if, like many other SME business leaders, I am not alone in understanding that this is a very difficult and often distressing time for everyone concerned, not least those people one has had to lose for no real fault of their own.
In our case we have had to lose 5 people from a team of 80. Not bad perhaps when compared with some of the horror stories we read, and definitely a lot better than going into administration. Why is it though that, apart from the enormous stress and upheaval that those 5 people face, government employment legislation ensures almost all of the 80 staff members throughout the company are caught up in the process of redundancy consultation that affects morale, increases stress and ultimately undermines productivity at a time a company can least afford it. I am of course referring to the heavy handed employment process that all bar the smallest companies are forced to submit to.
The reality is that management in a small to medium size business (SME) can readily identify where there is insufficient work to support a full time role, they are almost certainly in control of their forecast business and understand how to redeploy their people to maintain sufficient profit and cash revenue to see them through the downturn. It surely also is the Directors who are paid to make difficult decisions to make them, without having to ask staff to come up with proposal as to how to avoid the situation, when they are not privy to all the financial information within an organisation.
Yet legislation forces SME’s to engage all members of a department, or
in some cases a whole company, in a complicated consultation process
including at least four formal meetings, the setting of a job selection
criteria to ‘evaluate’ which employee is at most risk, scoring the
criteria , followed by a further meeting to notify the staff the
outcome. No-one is exempt from this process, even those under the most
challenging of circumstances such as a serious illness: legislation
requires that even someone in hospital must also be "consulted" about
redundancies. Absurd? Just ask the cancer patient who had to be
consulted about being "at risk" of redundancy.
The stress to staff caused by this protracted lengthy process, when the
staff themselves just want to know the outcome, certainly seems to
outweigh the benefit that this legislation was put in place for, to
ensure fairness to staff. However with employee tribunals siding
heavily on the side of employees, with the slightest technical breach
of process resulting in high payouts to employees that companies can
ill afford, what choice does an employer have but to follow the process
strictly and watch the stress mount.
So what’s the alternative? I accept that businesses where there are
significant numbers of employees doing very similar jobs should be
subject to a process that ensures fairness. This legislation was
probably designed with that in mind. Yet SME’s which are in a very
vulnerable position do not often have those circumstances, and in that
case Directors should be free to direct, and exempt from this
requirement as it presently stands. Few will abuse the process,
particularly when making redundancies in smaller companies is always a
very personal and intimate process that is never done with anything but
It seems Prime Ministers can dispense with employment legislation when
it comes to Cabinet re-shuffles. All that SME’s need is a little more
flexibility – not the rigid hand of regulatory inflexibility.