Sometimes I wonder whether the law of unintended consequences is intentionally overlooked. In its well-intended and much needed drive to deregulate the labour market, heralded in a leaked report earlier today, the Government may now inadvertently be destablising it. Of course, it’s too early to say this will happen as any ideas are only in draft form at the moment, but there is a more important concern in that it risks making workers less effective, and compromising economic growth.

Innovation compromised

CMI research proves that the best and most effective employees are those that challenge, take risks, and innovate. The chances of their doing these things, knowing that their employer can sack them at any time – and without good reason – are vastly reduced. As a colleague so succinctly said to me this morning: “You don’t make the big calls with Big Brother looking over your shoulder.”

Government backtrack

Of course, the government’s spinners are already backtracking on the report – written by a venture capitalist barely involved with government, save for his donations to the Conservative Party. Yet just this month, the Chancellor, George Osborne, revealed plans to extend the right of employers to sack staff without fear of an unfair dismissal claim. Currently, employers have this right only for the first twelve months of an employee’s service. In April, that term is due to be extended to two years.

Poor deregulation

The research is clear: managers support deregulation as a general principle, but not for its own sake. Indeed, in some areas they would appreciate more government intervention – chiefly in the areas of training and development that should also serve as a safeguard against having underperforming staff.

There is good regulation and there is bad regulation. This war on unfair dismissal rights, a bedrock of job security and thus a driver of innovation, falls in the latter category.

Yes, the debate has caught public imagination – but let’s not forget that this is only a draft report. Hyperbole and headlines like those in today’s news might only serve to discourage managers from the open, honest and timely conversations which ultimately are needed to manage performance.

What are your views on the steps the government is taking to reduce workers’ rights?