Welcome to our October Update
The primary focus of this edition is the Government's latest proposals for employment law reform. David Green gives us his opinion on these and we take a look at what we think the likely outcome of the consultations will be. We have also taken this opportunity to include a survey based on one of the consultations and would be very interested to hear your views. We are intending to feed back into the consultation with the views of our clients and contacts as well as the views of the Employment Group. Finally, we give some practical tips following recent cases as well as updating you with the latest employment-related news.
Proposed Reforms: The musings of a grumpy old man
Article by David Green
The Government announced in September, with a great fanfare, further proposed reforms for employment law (details of which are below). This followed on from the decision to increase the qualifying period for unfair dismissal from one year to two years, which was introduced in April of this year. The Government is now entering into consultation in respect of these proposed reforms and one has to ask whether the proposals are real, meaningful reforms or simply political spin.
In this update we attach a link to a survey we are running for our clients in respect of one important aspect of the Government consultations for HR practitioners relating to the ending of the employment relationship. Whilst I have no wish to influence your own opinions, I highlight in this opinion piece issues that do need careful thought before any changes are introduced.
The Government states in its consultation paper that it wants to facilitate open discussions between employers and employees without concern that this could be used against either party in the event of an unfair dismissal claim. The proposals deal only with unfair dismissal claims because of the constraints of European law in respect of discrimination.
The first question to ask is whether any of this is necessary? Surely any employer would have reached a conclusion about an employee's behaviour and performance within the first two years of employment and, if that is the reality, then they can dismiss the employee in those circumstances without facing a claim for unfair dismissal. What do you think?
The first question to ask is whether any of this is necessary?
If it is accepted that change is necessary, then I agree that calling compromise agreements, settlement agreements is a more logical name for this process. However, the Government's whole rationale for this proposal is that it allows discussions to take place without there being a dispute between the parties. Current case law means that if there is no dispute between the parties then any "without prejudice" discussion can be considered by an employment tribunal. The reality is, however, that employers have no difficulty in ensuring there is a dispute between the parties before without prejudice discussions take place, so is any of this necessary? Opinions please.
The real risk of this proposed legislation is it actually will achieve the same result as the introduction of statutory disciplinary and grievance procedures - namely an explosion of satellite litigation. Yes, this would be good for lawyers but it certainly would not be good for employers. If you start a conversation with somebody who is a poor performer, what is to stop them alleging that their poor performance is linked to childcare, sick relative care or due to an illness? Discrimination issues will be raised and the conversation is no longer protected.
The Government is proposing in the Statutory Code that there are guidelines as to the amount of compensation to be paid. I would ask all employers whether they want to be bound by such guidelines because any minimum amount would become the minimum amount you are expected to offer. The one proposal that I am sure most employers would want to give consideration to is reducing the amount of compensation for unfair dismissal. I am sure that this will be welcomed by all employers and in terms of what that cap should be, this is your opportunity to make your views known in our survey. However, one final word of warning. If the unfair dismissal cap is greatly reduced then, again, an explosion of claims alleging discrimination may be the unforeseen consequence of such a change.
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