If it ain't broke why try to fix it?

A few months ago David Cameron said that a businessman told him “I don’t care if the UK’s processes are more flexible than most European countries”, as it was cheaper to hire and fire in the US. The Prime Minister went on to say “that’s like saying we’re better than Italy at cricket. The real competition is the US and Asia. That’s why I want to deregulate and cut back on bureaucracy”.

Vince Cable chipped in saying “what we are doing here is hacking through the excessive red tape and regulation that prevents too many businesses from creating new jobs in the first place” along with “ambitious plans to deregulate and modernise employment relations”. However, within the same speech he admitted “the UK has one of the most effective and lightly regulated labour markets among developed economies”.

A few weeks ago Liam Fox continued the theme arguing for the wholesale “deregulation” of the labour market saying “it is too difficult to hire and fire and too expensive to take on new employees”.

I think we can safely conclude that the government’s aim is to deregulate employment law, moving away from what was previously employment protection, to employer protection.

Aside from political ideology, I believe there is no credible evidence to support this push for deregulation.

According to the World Bank’s ‘Doing Business’ rankings, the UK ranks 7th in the world for business ‘ease of operating’ out of a total of 183 countries, behind only, in order, Singapore, Hong Kong, New Zealand, the US, Denmark and Norway. Yes, that’s right; we are currently, according to the World Bank, the 7th easiest country in the world within which to operate a business. That’s before any of the government’s proposed employment deregulation kicks in.

On top of this, the OECD’s ‘employment protection index’ measures the procedures and costs involved in dismissing and hiring workers and employees across the developed world. Of the world’s 21 largest economies, the UK currently already ranks as the 3rd cheapest behind only Canada and the US. This means that out of the 21 major economies, the UK has the 3rd lowest level of employment protection and associated costs.

In contrast, in terms of increases in unemployment, Germany and the Netherlands, whilst having much higher levels of employment protection and regulation, have had smaller rises in unemployment. Also many would point to heavily regulated and protected German workers as being very productive and of course no-one can deny Germany’s current success.

There is no credible hard evidence supporting the government’s view that ‘hacking and slashing’ employment protection will fix the UK’s economic problems. Given the fact that many countries have much higher levels of employment protection, not least Germany, maybe the Government should take an alternative approach, by increasing employment protection!

Finally, given the most recent Employment Tribunal statistics, the government no longer seems to be banging the drum that ‘there are too many Employment Tribunal claims and so we must cut employment protection’. This is hardly surprising, given the fact that as reported in our last blog the latest quarterly statistics for the Employment Tribunal covering the period from July to September 2011, show there was an overall fall of 30% in new claims with a 41% fall in new multiple claims (such as for equal pay). Hardly an imperative for change!

David Sorensen - Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

All Change in the Employment Tribunals

We blogged in January about the introduction of Tribunal fees.

More changes lie ahead.

Firstly from 6th April 2012 the qualifying period for eligibility to claim unfair dismissal increases from 12 months to 2 years.

Employees who started work on or before 5th April will still benefit from the old rule.

But new employees will have to wait 2 complete years before they are entitled to make a claim for unfair dismissal.

That means 2 years of uncertainty in a job climate that is already filled with uncertainties for many.

But we’ve blogged before that Government seems to be deaf to the many well-informed arguments about this.

I was intrigued to see that the latest Tribunal statistics show that for the period July to September 2011, the number of new claims received by the Employment Tribunals dropped 30% compared to the same period in 2010.

30 per cent.

Our experience is that, given the difficult economic times, many workers are refusing to stick their heads above the parapet, and we suspect that that accounts in no small part for the drop off in Tribunal claims.

But what with new fees to pursue claims, and longer waiting periods before one is eligible to pursue them at all, and much political posturing about the importance to business of “cutting red tape” we have to pose the question: with the number of Tribunal cases dropping off sharply, is Government trying to fix something that isn’t even broken?

Paul Scholey - Senior Partner
 
For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.
 
 

In the Spotlight: Tribunal Fees

The Ministry of Justice has now published its consultation paper in relation to charging fees in Employment Tribunals. The Department is seeking opinions 2 proposals put forward in relation to the structures. It is, however, clear that fees will be introduced irrespective of any access to justice issues.

Both proposals divide claims into levels according to the potential complexity of the claim, with more straightforward areas of the law being level 1 (for example breach of contract and unlawful deductions from wages), level 2 claims for more complicated cases such as unfair dismissal and complaints in relation to failure to inform and consult under TUPE, and then the most complicated claims such as equal pay and discrimination are at level 3.

What this means is that it may cost £150 to issue a level 1 claim under option 1 or £200 under option 2. It is proposed that this fee will apply irrespective of the value of the claim. So what this means in practice is that an employee who is owed say £50 unpaid wages will have to pay 3 or 4 times the amount that he is owed in order to reclaim that amount. Employees who simply want a declaration as to their terms and conditions of employment will also have to pay this fee.

If option 1 is adopted, not only will the individual have to pay the £150 on issue, but if the case has to be determined at a hearing, they will then have to pay an additional £250 hearing fee.

Level 3 claims will have to pay £250 issue fee plus a staggering £1,250 hearing fee.

What that will mean in practice is that employees are likely to be dissuaded from pursuing low value complaints simply because the Tribunal fees will be more than they could expect to recover from a claim. There does not appear to be any proposal for a dispensation of the fee in such low value claims.

It is also likely to mean that employers will be taking a tactical approach to claims and may defend claims to a hearing on the basis that the level of the hearing fee that will have to be paid will again put individuals off continuing their claim and the claim is then more likely to be withdrawn.

So whilst the Government’s intention is to encourage early resolution of workplace disputes, the effect will simply be to prevent employees from pursuing complaints and access to justice will limited.

And what does “low value” mean? We’re sure that for the politicians £250 is no great shakes; but for many people it’s a week’s pay. But who will be able to risk (or simply, afford) £150 to try to recover £250. It’s the people who can least afford to take the hit, who will have to do so under the proposed regime.

Toni Haynes - Solicitor

For further information, please contact our Employment Rights team on 0113 245 0733

Do Governments Have Ears?

I’ve just read the Government’s response to its ‘Resolving Workplace Disputes’ consultation.  We submitted our own views (copies available for free if you are interested - email us if you’d like to see what we thought) and now we can see what the politicians think.

Our view was that a 12 months qualifying period for eligibility to claim Unfair Dismissal was alright.  2 years is too long.  Surely a decent employer will know inside a year whether they need to dismiss?  And there’s the adverse effect on staff job security too.

The Government noted:

-  Most consultation respondents disagreed with increasing the period to 2 years
-  The increase would not reduce the number of claims by the amount the government had forecast (read: their scaremongering was overdone)
-  Minority groups (e.g. women, disabled people) would probably be proportionately worse off following the increase
-  Small businesses weren’t any more affected by these claims than bigger ones

Good.  That’s settled then.  No need to increase the qualifying period.

The 2 year limit comes into force in April 2012.

And despite negative responses to the idea of ET judges sitting alone in these cases, the Government’s going to do that, too.

I’ve wondered for a few years now whether there’s any point responding to Government consultations.  Why ask the experts when you’ve made up your mind already?

- Paul Scholey, Senior Partner

Flexible Working

The coalition government is keen to reform employment laws, but for the better? 

The Beecroft Report, commissioned by David Cameron, calls for the abolition of the right to request flexible working, in addition to the removal of employee protection for unfair dismissal. 

Currently, employees with children under a certain age and carers are entitled by statute to make a request to work flexible hours, subject to meeting certain qualifying criteria and as long as they follow strict procedures. There is no obligation on an employer to grant the request, but it must be considered seriously. 

It has been said by the coalition government that it is committed to extending those statutory rights to request flexible working to all employees, not just parents and carers. However, it is feared by Adrian Beecroft, a venture capitalist, that extending flexible working would have a detrimental effect on businesses and would lead to a tidal wave of flexible working requests.

The Chartered Institute of Personnel and Development (CIPD) in response has made a Freedom of Information request to see how many tribunal claims relate to the right to request flexible working. The figures show that out of 218,100 claims accepted in 2010/2011, only 277 alleged that employers failed to consider a request for flexible working.  229 of these were successfully conciliated and only 10 of the 48 claims that reached the Tribunal were successful. 

So is it not now clear that the fears expressed about extending the right to flexible working are grossly exaggerated? CIPD say the figures show that most employers already recognise that flexible working is an integral part of the modern workplace and are happy to consider such requests. That may be the case. Or it may be that the statutory right to request flexible working arrangements lacks any real teeth and the procedures to be followed to make a valid request are simply too rigid. It is very difficult for employees to do anything about an employer’s refusal to allow flexible working. 

Either way, it seems unlikely that the extension of the right will lead to an avalanche of requests. Even if requests were to increase, surely a good employer would recognise that employees who get to work flexibly are likely to work harder and are more loyal. Hopefully, the government will stick to their guns and increase flexible working rights. In this tough economic climate there is too much emphasis on diluting employees’ rights, which could ultimately be counter-productive. Promoting a good work-life balance is so easily forgotten. 

- Daniel Kindell, Solicitor

For further information, please contact our Employment Rights team on 0113 245 0733

Retirement? What Retirement?

I think we are all slowly coming to realise that with the rising costs of living, increase in university fees and the like, we’ll all be needing to work longer in the future. Also, with improving health and people living longer, many want to work and not retire. With the recent removal of the default retirement age of 65, it’s got to be a good thing that employees will be able to choose to work beyond 65 if they wish to. 


A recent survey of employers shows this. It indicates that the majority of employers are doing without a default retirement age. The survey of senior HR professionals in the UK, reveals, among other things, that only 3% of employers intend to keep a specific retirement age, 86% of employers are letting employees over the age of 65 continue in the same role and nearly half of employers are considering flexible working arrangements for over 65s. 

That sounds positive, but on the other hand, only 11% of employers recognise the potential benefit of retaining experienced employees more easily.
What it does show is a shift in ‘mind set’ which means older employees will find it easier to remain working for their employer well after they reach 65.

- David Sorensen, Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team. 

EAT rules students should be allowed to see their teacher's face

The recent news that France has imposed the first Niqab fines on 2 French Muslim women who continue to wear the full-face veil despite the new law banning it, prompts us to think about the position in relation to the manifestation of religious belief in the UK.

The law appears reasonably well settled and has been consistently interpreted, but many of the well reported cases have been appealed to as high as the European Court of Justice: judgment in the case of Jivraj v Hashwani2011 UKSC 40 has been given this month by the Supreme Court.

Notwithstanding the hysterical approach adopted by the media, at large the decisions this far taken in the UK have been in line with common sense.

Significantly, but not widely reported, AishahAzmi, the British Muslim teacher who refused to remove her veil in a primary school when male colleagues were present, was told by the EAT to let her students see her face; an approach most would think in line with common sense – students should be able to see their teachers face, it was argued, and our courts have not disagreed.  Certainly there is no evidence here of political correctness gone mad (much though that is what the media would prefer to report).

It is right that a proportionate response should be taken when addressing needs in the workplace, but leaving people free in their own time to do as they wish, as long as they are not harming anyone, seems to us to be far more satisfactory in today’s multicultural society than imposing fines on women. 

- Anna Power, Associate

http://tinyurl.com/3vxoclw