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What is the best way forward on employment law changes?
Professor David Rhodes, chairman of the deep-sea pipe-welding company Isotek Oil and Gas used to employ nearly 10,000 people worldwide when he ran hi-tech electronics company Filtronic plc in Saltaire. Now he employs 20, half of them PhD graduates.
The successful application of his innovations has made him a millionaire. But over Christmas and New Year in 1987, when Filtronic was on the verge of running out of money, he was faced with making 15 people redundant or asking his workforce to volunteer for a 15 per pert cut in pay across the board. He asked them to choose.
To his surprise, they voted almost unanimously for redundancies, including the 15 whose jobs, little did they know, were in jeopardy. The memory of that time still leaves an uncomfortable feeling.
So the current debate about whether employment laws should be amended to make it easier for employers to say ‘You’re fired!’ by introducing no-fault dismissals and by slashing the redundancy consultation period from 90 days to 30 – two of the proposals in the report by venture capitalist Adrian Beecroft that has stirred up so much animosity – disturbs the professor.
He said: “In America, you still have ‘fire at will’, no matter how long you’ve worked for someone. I know of a case of someone who was fired two weeks before he was due to retire, so he lost all his pension rights.
“How can you give 90 days’ notice of redundancy when your company hasn’t got any money? But I think most workforces are receptive to talking and agreeing the best way forward without legislation. Too much legislation is stupid.”
He pointed to the deal concluded recently between General Motors and 2,100 workers at the Vauxhall plant at Ellesmere Port, Cheshire, worth investment of £125 million, 700 more jobs and guaranteed employment at least until 2020.
Employees voted in favour of a new pay and conditions package, including moving to a three-shift working day, a working week of 40 hours instead of 37 and a manufacturing function for 51 weeks of the year instead of 46.
Prof Rhodes thinks big companies can more easily come to such arrangements. Problems that arise from individuals can be subsumed, whereas in small companies, one problematic employee can more easily disrupt life for everybody else.
“I think Adrian Beecroft has looked at it from the point of view of small companies. If you’ve got one bad egg in a small company, you’ve got a problem,” he added.
Small companies play a big part in Bradford’s economy. The Bradford District Economic Strategy document, published last year by Bradford Council, states that of 15,700 workspaces in Bradford in 2008, more than 83 per cent employed fewer than ten people; 12.5 per cent employed fewer than 50 and 0.8 per cent employed more than 200.
Val Summerscales, secretary of small business organisation Bradford Chamber of Trade, is inclined to think the row over the Beecroft Report is a distraction.
She said: “I think what he was trying to do was clarify ambiguous parts of employment law as it affects very small businesses, which have different consultation procedures than bigger companies.
“But firing someone would still be a last resort because of the disruption that would cause – the need to find a suitable replacement and train them.
“David Cameron said Beecroft applied to micro businesses; but who determines what is a micro business and what is not?”
Prof Rhodes emphasises the importance of flexibility in employer-employee arrangements, likening a workforce to a family.
He said: “The key thing is to get employees involved. Management is not about telling people what to do and what not to do; it’s about getting people to make their own decisions on a rational basis and encourage them to do that.
“You don’t want people to hide their mistakes. You want them to tell you, so that you can sort them out, like you do in a family. You don’t seek revenge.
“Empowering people as a team, not as individuals: there is a difference. Individuals tend to become dictatorial, you see that in the political world. You encourage people as a team by talking to them individually, not by putting a whole lot of them in a room and talking at them.
“Family units are very resilient. In companies, that comes down to management style and not being crippled by legislation.”