The Beecroft review of employment law has implications for both the pharma industry and the NHS. Maxine Vaccine considers the significance of a policy review designed to help companies lay people off.
The Beecroft report on UK employment recommends a number of measures that would make it easier for employers to make staff redundant, dismiss employees and manage the HR aspects of a takeover.
The report, commissioned by David Cameron, urges a “bonfire of regulations” around job security:
• The mandatory 90-day consultation period for a redundancy programme would be reduced to 30 days – or to five days if the company is in “severe distress”.
• Loss of earnings compensation for employees who make successful unfair dismissal claims would be capped, while tribunals would be strongly pushed to reach a ‘no fault’ conclusion.
• The right of employees to retain terms and conditions (‘transfer of undertakings’) when a company is taken over would be scrapped.
Venture capitalist Adrian Beecroft, a leader in the private healthcare field, insists these measures will support “job creation”.
The report has already drawn strong criticism from Business Secretary Vince Cable, who described its underlying principles as “nonsense”.
Cable said: “British workers are an asset, not just a cost for company bosses. That is why I am opposed to the ideological zealots who want to encourage British firms to fire at will.”
However, Business and Enterprise Minister Mark Prisk – who took Cable’s place without notice in a Commons debate on the report – said the Government was already “actioning” 17 of Beecroft’s 23 proposals.
There are two reasons why the UK pharma industry should pay close attention to these proposals.
The first reason is that they clearly impact on the pharma industry, where redundancies and takeovers are commonplace and claims of unfair dismissal are not unknown. The belief that making it much easier to lay off staff will lead to a revival of the job market seems naïve at best. It may make life easier for the HR Director, but it could spell disaster for industry staff and their families.
The second reason – the sting in the report’s tail – is that Beecroft clearly has the NHS in his sights. He runs the private equity firm Apax Partners, which owns two of the UK’s leading private healthcare companies: Capio and General Healthcare. As private sector takeovers of Foundation Trusts and CCGs become the norm, the Beecroft measures will grease the wheels of asset-stripping.
That phrase “severe distress” seems tailor-made to describe the imploding NHS organisations of the near future. It’s what former NHS Chief Commissioner Mark Britnell meant when he told private healthcare providers in late 2010: “The NHS will be shown no mercy, and the best time to take advantage of that will be in the next couple of years.”
Interestingly, Britnell – now an independent consultant – said recently that he would like to go back into the NHS.
He’d better hurry.