A senior Liberal Democrat has described a proposal to scrap unfair dismissal and allow managers the right to sack unproductive staff without explanation as “madness”. In a report seen by the Daily Telegraph and commissioned by Downing Street, the venture capitalist Adrian Beecroft suggests British workers should be banned from claiming unfair dismissal so companies can sack them and find more capable replacements, saying this would boost economic growth.
The document has generated a furious response from trade unions. Downing Street declined to comment on the contents of the report other than to say it was not “a final document”. But Norman Lamb, the chief parliamentary and political adviser and parliamentary private secretary to the deputy prime minister, Nick Clegg, said taking away protection from unfair dismissal would damage the economy because it would increase workers’ fears that they could be arbitrarily sacked.
“I think it would be madness to throw away all employment protection in the way that’s proposed, and it could be very damaging to consumer confidence,” Lamb said. “What we are talking about here is every single employee in the land being in a position where their employer could arbitrarily terminate their employment – and the impact that could have on consumer confidence, fear of losing your job, would potentially be very damaging. I just think it’s also not right to throw away that sort of scheme of protection.”
He warned that the “law of unintended consequences” could mean staff who criticise or challenge their employers could be dismissed as a result, pointing out that existing laws already enable employers to get rid of staff where there is clear evidence of underperformance. “The existing law gives employers far more rights than many actually recognise, and it’s easing the way to use those existing rights much more easily that I think is the right way forward,” he added.