De-regulating employment law, what’s it all about?

Now, we’ve made it clear many times that we have massive concerns not only about the content of the changes to employment law that are coming but also the reasons behind them. It seems that the Government’s own recent research now completely supports our concerns.

 

The Government said we are over-burdened by ‘red tape’ and regulation – yet the current Minister for Employment Relations wrote last week that “the UK...has one of the most lightly regulated labour markets in the world” and ”burdens from employment law (in the UK) are low by international standards”. She confirmed that we are the third least, yes least, regulated major economy, just behind the US and Canada and we have less employment law than every other European economy as well as South Africa, Australia, Russia, Chile, Korea, Brazil, India, China and the list goes on and on. The OECD figures (which the Government agrees with) confirm that we have one third of the employment protection of China and half that of Germany[1]. A previous Government report accepted that UK employment regulation was already in “good shape”[2]. I should make clear that the above research was done before the majority of the Government’s changes are due to take effect just after this Easter.

 

They said we have too many Tribunal claims – the latest ET statistics show new ET claims have dropped 15% on the previous year[3]. Other Government statistics show that in 2011 96% of UK workplaces had no claims made to a Tribunal by any employee; in other words the percentage of workplaces in which an employee made a Tribunal claim was 4%[4]. Further, the Government’s report accepts that Tribunal claims are “relatively rare”.

 

They say that the Tribunal’s compensation is far too high – the most common award for Unfair Dismissal is only £4,560[5].

 

It seems that recently even the Government has accepted the fact that the truth does not support their case for change. Their new tack is to argue that in fact it is the “perception” of business (which they admit “may often be misconceived”) that has “given rise to perceptions that employment law is costly, time-consuming and over-bureaucratic” (this is the Minister again)[6], hence why change is required.

 

But does business really have such a perception? Back to the Government’s own research – this has found that business says “employment regulation was generally considered both necessary and fair” and it concluded that any perception of employment law as burdensome has been worsened by the ‘anti-regulation’ debate (which itself has been heightened by the Government!)[7].

 

So, at best the evidence for change is based on perceptions, which may not really exist and are “often misconceived” - surely a weak basis on which to drive massive Government changes to the law?

[1] Page 11 BIS Employment Law 2013: Progress on reform, March 2013

[2] BIS Employment Regulation Report, September 2012

[3] Employment Tribunal and EAT Statistics for1 April 2011 to 31 March 2012

[4] Page 25 BIS Employment Law 2013: Progress on reform, March 2013

[5] Employment Tribunal and EAT Statistics for 1 April 2011 to 31 March 2012

[6] Page 3 BIS Employment Law 2013: Progress on reform, March 2013

[7] BIS Employment Relations Series 123, Employment Regulation, March 2013


David Sorensen - Partner

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