Monday, January 10, 2011

Britain to Relax Employment Laws in Effort to Increase Employment

ET PJH Law reports:

We can expect to see a major shake up to some key employment laws over the next year or so.  It is looking almost certain now that the Coalition will allow companies to dismiss during the first two years of employment without the fear of a Tribunal claim (rather than the current one year period).

The papers this morning [see Sack the Slackers] are headlining the proposed ‘Employer’s Charter’ which will embody this change along with a fee for lodging a Tribunal claim and exclusions for smaller companies from certain provisions, such as the length of time statutory sick pay must be paid.

The idea is that this will encourage firms to take on workers without fear of reprisals or ending up stuck with employees they may later not want or need.  The flip side of the coin, however, is the extension of the period of job insecurity for new employees.   However, given this approach worked back in the 1980’s and was linked to an increase in employment, it is likely it will be tried again soon.

Maybe, but I'm not convinced.  I can understand how hyper-intrusive labor regulation -- such as that in India -- might discourage employers from hiring by making it almost impossible to fire.  I'm less convinced, however, that this is true at the margins.  Using the above example, I think a year is plenty of time for an employer to figure out whether an employee is a slacker or a bad fit or prone to temper tantrums or whatever.  I'm not at all convinced that extending Britain's version of the at-will rule to two years will precipitate a momentous increase in hiring.


Employment Common Law, Employment Discrimination, International & Comparative L.E.L. | Permalink

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