Thursday, 17 September 2009

Less law. More employment

Interesting thoughts from Tony Light, Publisher, Totally Media Ltd.

Does EU membership limit such innovation?

Less law. More employment

We have all read the headlines. Unemployment is expected to continue to grow. Small businesses are still struggling in the face of recession. So me thinks it’s time for another cunning plan.

Anyone in business cannot fail to have noticed the impact of employment law over the past couple of decades. It makes a mockery the cut and thrust of TV dramas and soap operas. Of course it’s much more exciting for Tony to march into Coronation Street’s ‘Underworld’ and yell “You’re fired” to Janice Battersby, his latest victim. It doesn’t have the same dashing impact if he follows correct practice and politely asks Janice to step into his office where he will start the process with a discussion that outlines his cause for concern. The next episode will see him delivering a carefully worded letter of warning, followed by another meeting with another senior officer of ‘Underworld’ on hand as an in dependent witness to the discussion. Maybe by the time the Christmas episode arrives the final warning letter will have been delivered only for Janice to reveal – shockingly – that she was never issued with a proper contract of employment in the first place and therefore has a strong case to defend her position and maybe seek compensation.

Just not good television is it? But it is a closer resemblance to real life.

The fact is that in 2009 most small businessmen – I refer not to those with the stature of Ronnie Corbett, but those who have to be all things to all men, including a handful of staff and without the benefit of a safety net called a personnel department – will at some stage have vowed that they will never employ another person as long as they live.

There are many examples that have passed into employment folk-law to demonstrate the threat of getting it wrong. The case of the employee that was caught stealing money from the handbag of a colleague during his first week on the job – was dismissed on the spot – and ultimately won a compensation claim for unfair dismissal because his hapless employer had not followed the correct procedure when firing him (probably thought he was running an underwear factory).

Even those businesses that do want to recruit live in fear of not following the correct selection and interview processes. One false move and you could be paying ‘employment compensation’ claims to an army of people that you have never even met!

I have even heard a rumour that the law in Spain states that – as was allegedly the fact in one case – an employee that crashed her car on the way home, under the influence of substances that can only be described as illegal – was entitled to be financially maintained by her employer for life, because the accident was on the way home from the office. And when the employer is a hardworking self-employed individual (not a faceless corporation) it begs logic.

Maybe we should not be surprised that unemployment is rising.

So here is my cunning plan.

Time for radical thinking Mr Brown – or Mr Cameron – and to make a change of logic and direction. This is how it works.

Allow small businesses – defined by number of employees, for example less than 50 people – to ‘opt-out’ of employment law. “How unfair!” you shriek “surely that’s a mandate for a return to the dark ages of employee abuse by selfish, evil, money-grabbing, slave-trading business monsters”.

No. There would have to be a few conditions that allow potential employees to make informed common-sense judgements for themselves.

If a business ‘opts out’ it is legally obliged to do a few things. Firstly it has to have the ‘I have opted out of employment law’ logo on it’s letterhead and business cards (I envisage a highly productive little character with a relieved look on his face). It also has to show this logo on all of its staff recruitment programmes.

Additionally it would be legally obliged to register on the Government’s ‘I have opted out of employment law’ website. And this is the interesting bit. Here any prospective employee can view details of how many staff each business is currently employing, how many it has had in the past, and how long the average staff member stays for.

If the business is a dry-cleaning business that was established in 1973, and has employed the same five ladies for the past 36 years, there is a reasonable likelihood that the boss is a person of pleasant disposition that delivers nicely cleaned garments to his customers, has no nasty habits such as bullying or sexual harassment, and is a thoroughly good egg. The alternative potential example of a cafĂ© that has had thirty-eight staff on its books in the four months that is has been open and current only retains two of them raises a few alarm bells. Might have a bit of trouble in the recruitment process. And quite right too – ‘cos treating good staff well is the route to good business.

If someone looking for a job can’t be bothered to do a bit of simple on-line research before taking a job then I would say they deserve what they get. OK, there would probably need to be a TV and newspaper advertising campaign to remind people to ‘look out for the opt-out logo’ and ‘check-out your future employer’ just to be sure.

And other nice little features could emerge. For example there may a degree of negotiation created by this initiative. Opt-out businesses may end up having to pay a little more than ‘normal’ employers. That gives some extra comfort to new staff – but is probably more than acceptable (and affordable) to the employer compared to the cost of a personnel department, employment consultants and a few years’ worth of sleepless nights.

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