Deregulation for all – except unions?

For a Government obsessed with the ‘D’ word, their proposed changes to unions by way of the Trade Union Bill will cause unions to have to dig very deep to meet the anticipated additional costs of the red-tape they are required to comply with.

The Government’s own BIS impact assessment identifies that the changes will immediately cost UK unions over £11 million and a further £26 million over 5 years. Yes, tens of millions of pounds will be incurred by unions in complying with the additional red-tape involved.

Of those costs, the Certification Office (the statutory body overseeing unions) will increase its operating costs from the current £850,000 per year to nearly £2 million per year. These costs will be paid for by the unions.

If deregulation is a good thing – and we certainly hear that from Ministers often enough – why on earth is all this additional Red Tape being required?  It is hard to avoid the conclusion that it’s a thinly-veiled attack on the Unions.  Few countries in the West regulate and control their Unions to the extent we do here.  Is it really necessary to add to that burden?

David Sorensen - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Trade Union Bill

The much publicised Trade Union Bill will not have escaped anyone’s attention. The government (ahead of more drastic cuts to public sectors which we know are coming) are seeking to greatly reduce trade unions’ ability to organise industrial action – and in the case of ‘important’ public services, effectively remove it.

Under the Bill, for a ballot on industrial action to be legal there must be a 50% turnout of all members. So an abstention will now be equivalent to a ‘no vote’. Further, if you work in health services, education, fire services, transport services, nuclear decommissioning and border security, a ballot on industrial action may well require 40% of those balloted to vote in favour of the action for it to be deemed lawful. Let’s look at the reality of this. 1,000 members are balloted regarding industrial action. 500 members vote – the first hurdle is passed. However, of the 1,000 members who were balloted, 400 (40%) must vote in favour of the industrial action. Therefore, out of the 500 members who voted, for industrial action to be lawful, 400 must vote in favour of it. That is 80% of the voters! Let us not forget that the current government who are bringing through this Bill won only 36% of the votes cast, representing less than 25% of the votes of eligible voters.  They would not be in power, by a shortfall of some 15%, under the test they now seek to apply.

Unfortunately the ideological attack doesn’t stop there. The government will have the power to limit the amount of facility time spent by trade unions in public services, thereby directly limiting the union’s ability to represent their members and assist them in enforcing their statutory rights – clearly, restricting employees’ access to justice with swingeing employment tribunal fees didn’t go far enough. As part of the Bill, Trade Unions will also be required to provide annual reports to the Certification Officer (“CO”) with details of all industrial action and the use of political funds. Numerous restrictions and requirements will be implemented regarding picketing, the duration of strike mandates, and information that must be entered on ballot papers, to name but a few. One clear result of these measures will be an increased financial cost to the Trade Unions in carrying out any industrial action. And should they fail to meet any of these new arbitrary hurdles, the CO will have the power to fine them.

The government has also seen fit to change the opt-out requirements regarding the use of political funds. Currently trade union members are balloted providing them with the opportunity to opt-out of part of their subscriptions going towards political funds. Under the Bill, members will instead be required to opt-in to their funds being used in this way, and they must do so every 5 years. It is widely known that opt-in processes reduce participation. The result - a restriction in trade unions’ ability to engage in political debates, and to support the party or parties that support them,  We see no similar restriction on the ability of millionaire hedge-fund managers to donate as they wish, to support the parties that they prefer.

Paul Scholey - Senior Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

A new Government – where to, employment law?

Whilst we await further announcements, our David Sorensen has reviewed the Conservative manifesto and other policy documents to work out the 6 steps most likely to be taken by the new Government in employment law:

1. Scrap the Human Rights Act and replace it with a British Bill of Rights – this will inevitably affect e.g. the way in which Employment Tribunals conduct themselves and the sort of arguments about privacy in email use/social media/misconduct cases in the unfair dismissal context.

2. Restrict strike laws further – bringing in a minimum turnout for industrial action of 40% of the workers entitled to vote within certain sectors (fire, transport, health and education), criminalisation of certain types of picketing, an extension in the length of a union’s required notice of industrial action from 7 to 14 days, a reduction in the ‘life span’ of industrial action ballots so as to require regular fresh ballots to be called, allowing employers to use agency workers to provide cover during a strike etc. All of these steps will inevitably make it even harder for unions to support workers who strike and increase the (already enormous) red tape unions face in these cases.

3. Restrict trade unions in other ways – increasing the regulation of union members’ subscriptions, reducing union representatives’ facility time in the workplace, reforming the Certification Officer’s role etc.

4. Keep ET fees – despite the evident unfairness (e.g. Vince Cable said just before the election “there is enough evidence to suggest that this was a very bad move and should be reversed. It is highly suggestive that the fees are discouraging people - particularly low paid women - from pursuing their rights”) it seems that, subject to any adverse Court of Appeal ruling in the ongoing Unison judicial review, ET fees may now be here to stay.

5. Pull out of the EU? The big question – if so, what happens to all the EU-sourced legislation such as the anti-discrimination laws, Equal Pay, TUPE, Collective redundancy consultation? Does it stay or also have to go?

6. There are some potentially positive measures (assuming they are implemented fairly and appropriately) – the ‘tackling’ of illegal working; the ‘encouragement’ of businesses to pay the ‘Living Wage’; a tax-free minimum wage by increasing a worker’s tax free personal allowance to £12,500; 3 days’ paid volunteers’ leave for employees in businesses with 250 employees or more or those employed throughout the public sector.

The direction of travel is clearly going to be anti-union and anti-industrial action. Access to justice for workers and employees is not going to be a priority. There are bound to be more employment law changes coming as well – will they revive the previous Adrian Beecroft report? That recommended cuts to maternity rights, a reduction in TUPE protection for transferring employees, increases to ET fees (e.g. from the currently high £1,200 to the extreme £3,750) as well as the removal of unfair dismissal protection and replacement with ‘No Fault Dismissal’. Time will tell.

David Sorensen - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Cameron vs Ordinary Working People

Following the recent general strike by public sector workers, David Cameron pledges “to overhaul an archaic law" stating that strike laws are too easy for workers to rely upon and that “it is time to legislate and it will be in the Conservative manifesto” for the next election. It seem they propose to ban all ‘electronic picketing’ (the use of texts/emails by unions to gain support), make it a requirement for a 50% turnout for any strike ballot to be lawful (rather than a majority as used to elect MPs) and banning ‘rolling strikes’, bringing in a 3 month ‘shelf life’ for any strike action before a new ballot is needed.

So his policy is further changes to the same strike laws that the Court of Appeal described in 2012 as “highly complex legislation”, which can be seen as “a series of traps or hurdles” for a union to negotiate.

It’s clear that David Cameron simply wishes to make it harder and harder for workers to resort to strike action.

This from the leader of the same party whose leader some years ago described the right to strike as, in the language of the day, “the foundation of the liberties of the working man. In it are involved all those things which matter most in his workaday life…the right to demand improved conditions, shorter hours, higher wages; the right to defend himself against petty tyranny or ill-usage. The capitalist system on which our whole present civilisation is erected has grown up on the basis of the right to strike… the right to strike is the greatest glory of the capitalist system…”

Who was that? A certain Winston S. Churchill, admittedly not a politician who is often perceived as being a friend to the unions or to workers but a politician who seemed to have common sense and a sense of fairness.

David Sorensen - Partner
For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Regulation, Regulation, Regulation!

The Government is very worked up at present about regulation. 

 

I dislike red tape.  I think it is laudable that we should seek to regulate sensibly and proportionately. 

 

But there’s not a lot of joined-up thinking going on. 

 

So, in the midst of a set of Employment Law and Tribunal reforms that unashamedly aim to reduce the number of people bringing claims in respect of their employment rights to Tribunals, we see some bizarre anomalies:

 

• On 29^th July the Employment Tribunal fee regime begins – we have blogged about it before, but now we are getting to grips with the detail of what the scheme will mean in practice.  The rules and regulations are, in short, a nightmare.  You may have to pay a fee.  You may be exempt from fees.  You may have disposable monthly income at a level that means you get partial remission from fees.  You will have to complete endless forms and supply endless evidence to show just where your disposable monthly income falls.  The public will be confused.  Lawyers will ask, “who will pay us to fill in these new forms?”

 

And if a Claimant gets it wrong, chances are they might lose altogether their chance to enforce the rights that successive Governments have been so keen to trumpet on their behalf.

 

• To our astonishment, the Government is pushing ahead with the idea of “selling” your employment rights in exchange for shares on the commencement of employment.  The devil is again in the detail – the hoops through which employer and employee will need to jump, to qualify under the new scheme, are an exercise in how not to do red tape and regulation.  As a matter of principle, it can’t be right that you might have to sell your rights to get employment.  But in practice we tend to think that very few people are going to bother – it is more trouble than it is worth.

• Also from 29^th July we have a complete overhaul of the Employment Tribunal rules of procedure.  Not more regulation, necessarily, but certainly a sea change to existing regulation – and the two are pretty much the same thing.  Time to learn a new set of rules and procedures.

 

None of these changes were necessary.  In our view none of them are desirable.  All of them add directly and/or indirectly to the burden of red tape both as it affects individuals and as it affects businesses. 

 

Here we see the law in practice – and in this case, it is the law of unintended consequences.

 

Paul Scholey - Partner

 

For further information on Employment Rights, please visit our website or call 0033 3344 9600 and ask to speak with our Employment Rights team.

 

 

‘More Redundancies – Less Time’; the reduction in the period for collective consultation

Perhaps one of the most draconian of the 2013 changes to employment law is the reduction in the period for consultation, effective from 6th April 2013, when an employer proposes to make large-scale redundancies.  

As we have seen in the news in recent months, the downturn in the economy has hit even established businesses hard and we have read how the likes of Comet, HMV and Blockbuster have entered administration and have been forced to reduce their workforce.

As a firm we have also noticed an increase in the number of protective award claims - where employers fail in their duty to consult with their employee’s representatives, such as recognised Trade Unions, when mass redundancies are proposed - as businesses continue to struggle in the current economic climate.

Previously, under the Trade Union and Labour Relations (Consolidation) Act 1992, if an employer planned to make 100 or more redundancies within one organisation it had to consult the representatives of those affected employees for at least 90 days before the first dismissal took effect, providing there were not extenuating and unforeseen circumstances.

However, as of 6th April 2013, the 90 day consultation period has been cut to just 45 days, although where between 20 and 99 employees are earmarked for redundancy, the consultation period remains 30 days.

It was stated by the Employment Relations Minister, Jo Swinson, that the change in the law was because the previous 90 day period caused “unnecessary delays for restructuring and made it difficult for those affected to get jobs quickly”. It is therefore the government’s position that this change, along with all others planned for later in 2013, will create growth and flexibility by allowing businesses to easily respond to volatile and changing market conditions.

We however prefer the opposition view put forward by the Labour MP, John McDonnell, when he said; “the reduction means that the opportunity for consultation is hopeless. It will not happen and will be meaningless as there will not be the time for the employees to work with the employers to look at alternative plans for that company”.

This view, which we share, is supported by the example of Jaguar Land Rover who in 2009 announced that they were to make up to 1000 employees redundant, before £70 million was identified towards the end of the 90 day consultation period which ultimately prevented any job losses.

It is therefore doubted whether this change to the law does indeed “strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure[1)”...

[1] – Announcement by Jo Swinson, Liberal Democrat Employment Relations Minister, 6th April 2013

Chris Ridley – Solicitor

For further information on Employment Rights, please visit our website or call 0033 3344 9600 and ask to speak with our Employment Rights team.

Reduction in response time to government consultations

We often, as a firm, voice our collective opinion on government proposals. In recent years, we have spoken out on a number of issues, ranging from the implementation of a cap on trainee solicitors’ wages, to the Jackson Reforms in the field of Personal Injury law and the now imminent introduction of fees in the Employment Tribunals.

We therefore speak from years of experience when we say that clear and considered responses to consultations require a great deal of research and preparation, which can often take several months.

We were therefore alarmed to hear in recent weeks that the government has now introduced new guidance to shorten the twelve week period for which ministers were previously required to consult the public on government proposals to a mere two weeks.

This clearly will make it extremely difficult for interested parties to gather evidence and prepare a reasoned and informed response to policy changes that directly affect us all.

The upshot of this is that, potentially, sections of the public, in particular those with access to fewer resources who will no doubt struggle to meet the two week deadline, will essentially be left without a voice to challenge government policy.

This appears to us to be nothing more than an attempt by the government to suppress opposition.

To place the effect of reducing the consultation period into context, in their response to the reduction of consultation periods the Institute of Employment Rights cite the Enterprise and Regulatory Reform Bill as an example whereby the government introduced, in their words, a “technical amendment” to existing legislation, without consulting the public. This “technical amendment” was to section 47 of the Health and Safety at Work Act 1974, the significance of which is far-reaching as it overturns the law imposing employers’ strict liability for the health and safety of their employees, which has been in effect for 114 years.

The implications of this are that various existing personal injury clients of our firm who suffer from life-long, incapacitating injuries, including one client who lost an eye, and potentially a career, due to faulty work equipment, would in future have been prevented from bringing their claims against their employer.

We therefore share the view of the Institute of Employment Rights and have supported their ongoing petition to the Secondary Legislation Scrutiny Committee to voice our opposition to the government’s blatant attempt to stifle the voice of opposition.

Christopher Ridley - Solicitor

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

No credible non-political basis for the Government's changes to employment law

 

As lawyers, we can’t help but say: before you change something, look long and hard at the evidence. After all if it isn’t broken, why fix it?

 

What is now amazing us is that the Government’s own evidence indicates there are no sound, solid or non-political reasons for changing the current employment laws we have in this country.

 

For example, according to the BIS Employment Regulation Report for September 2012, UK employment regulation was already in ‘good shape’ before any changes were made.

 

Vince Cable admitted as much in November 2011 when he said, “the UK has one of the most effective and lightly regulated labour markets among developed economies”.

 

The BIS Response to the ‘No Fault Dismissals’ Consultation goes even further than this - identifying that the UK has less employment protection than the BRICS economies – Brazil, Russia, India, China and South Africa – and other developing countries.

 

Yes, that’s right - the Government itself believes we currently have less ‘red tape’ and employment law protection than the world’s fastest growing and newly emerging economies – and that’s before most of the proposed changes – watering down TUPE, bringing in ET fees, scrapping equality questionnaires, removing protection from third party harassment, cutting unfair dismissal compensation by possibly 2/3rds, bringing in ‘employee owner’ contracts etc - come in. Those changes are not expected till 2013.

 

It seems that all external data (largely covering the period before the Government changes began!) support the Government’s evidence:

 

-  Employment Tribunals claims are down 15% nationally.

 

-  The OECD says the UK is already the 3rd least regulated and cheapest labour market (2008) behind only Canada and US.

 

-  The recent World Economic Forum Global Competitiveness Report cited UK’s existing flexibility as to why it moved up from 10th to 8th place in its global rankings.

 

-  The World Bank’s ‘Doing Business’ rankings of 183 countries shows the UK was already 7th in the world in 2011 for ‘ease of operating’ behind only Singapore 1^st, Hong Kong 2^nd, New Zealand 3^rd, USA 4^th, Denmark 5^th and Norway 6^th.

 

So why change things? There seems to be no financial or economic need to do so - and the more the Government changes employment law, the more confused workers and businesses are about their respective rights and obligations - creating more, not less uncertainty.

 

Regardless of this, the Government seems set on a race to the bottom. Many European economies are required to amend employment regulation as part of IMF and European financial support conditions but we seem to be racing to beat them to become one of the world’s worst places to work in terms of rights and protection.

 

 

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.

 

 

 

Tribunal Statistics vs Employment Law Reform

 

The Tribunals Service has released statistics, for the period 1 April 2011 to 31 March 2012, showing the types and numbers of claims pursued. At the same time, Vince Cable continues to announce plans to reform employment laws to give more flexibility and confidence to employers managing their workforce. But do they marry up?

 

The total number of claims received by the Tribunal has fallen from 218,100 (2010/2011) to 186,300. For the year 2009/2010 the figure was 236,100. The fall represents a 15% drop in the number of claims being pursued in comparison to last year and a 21% fall in comparison with 2009/2010. 

The government is concerned that too many Tribunal claims are being pursued and, according to John Walker of the Federation of Small Businesses, “Too many small firms don't take on staff because they fear being taken to an employment tribunal.” Can this really be right when the number of Tribunal claims is dropping?

Vince Cable has recently announced a proposal to reduce the cap for compensation in unfair dismissal cases. The cap at present is £72,300. The Tribunal figures for 2011/2012 show that the median award of compensation in unfair dismissal cases was £4,560 and the average award was £9,133. The vast majority of claims do not get anywhere near the cap - so why reduce it?

The Tribunals have also been making more costs awards, where the losing party pays the winner’s costs. Costs should only be awarded in limited circumstances but it seems the Tribunals are more inclined to award costs these days with the number of awards rising from 487 to 1,411, with 1,295 of those awarded to Respondents i.e. employers. In fairness one of those cases involved 800 Claimants being ordered to pay costs, so if that case is counted as one a more accurate picture shows an increase from 487 to 612 costs awards. Nevertheless, there has been an increase in costs awards against a fall in the number of claims pursued. Plainly the Tribunals are already exercising their powers to dissuade employees from making unmeritorious Tribunal claims.

The median awards of compensation for discrimination cases range from £4,267 in religious discrimination cases to £13,505 in sexual orientation cases. Average awards are higher but skewed by maximum awards, such as £4,445,023 in a race discrimination claim. Of course there are going to be very serious cases which warrant substantial awards of compensation, but the figures do not begin to show that compensation is getting out of hand. 

There is so much discussion and consultation about reforming employment law and it all seems to be pointing towards making it even more difficult for employees to exercise their rights and gain access to justice. With the stats showing an ever decreasing number of claims and limited awards of compensation, I’m not at all persuaded there’s a need to change.  

Dan Kindell - Solicitor

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

 

State landed with £3m Jarvis bill

THE 1,200 staff who were sacked without warning by failing rail firm Jarvis are to be awarded more than £3m compensation - more than it would have cost to keep the company afloat.

The employees - of which 350 were based in York, 300 in Doncaster and 80 in Leeds - arrived for work on March 31 last year to be told they were unemployed. As a result the company failed to meet its statuary obligation to consult and give notice so the staff will be entitled to eight weeks compensation, capped at £380 per week. As Jarvis is no longer operating, it will be the Government which pays the bill and a tribunal court in Leeds yesterday heard that any staff who were unable to find work and therefore claimed Jobseeker's Allowance will have that, and any other relevant benefits, docked from their compensation.

The staff all worked for Jarvis Rail, Jarvis Fastline or at the York headquarters, Jarvis PLC.

Union bosses said it was disappointing that a number of workers, particularly those holding management positions, found employment swiftly and would therefore get more compensation than those who have been left jobless. It is also understood that administrators Deloitte went to Network Rail - owners of Britain's rail infrastructure - to request around £3m to keep the company going and retain staff but this was turned down.

Bill Rawcliffe, of Justice for Jarvis Workers and a member of the RMT Union, said: "This is only the first hurdle and the result is pretty much what was expected because employment legislation clearly states if you do not receive notice you are entitled to claim compensation.

"We think it is a disgrace that the compensation is being paid for by the taxpayer - that money should be paid by Network Rail which owed millions in work that had been already carried out by Jarvis workers.

"What is also difficult to take is compensation will have Jobseeker's Allowance and other benefits knocked off, but the management who did not have to claim benefits as they went round the revolving door and straight into other jobs will get the whole payout."

A Network Rail spokesman was unable to comment last night. About half of the organisation's budget is public money.

Unions claim some workers, who were also based in Glasgow, Newcastle, and Peterborough, were owed money for months before the company closed. Talks between Network Rail and the administrators officially finished in April 2010.

The fallout prompted a number of protest rallies, and Mr Rawcliffe claimed that workers from other parts of the UK have been carrying out the rail engineering work.

Unions were unable to say how many of the 1,200 had now found employment, but Mr Rawcliffe said those they knew of in work were now earning 30 per cent less in wages.

The tribunal yesterday heard that the company had no money at all to pay staff by March last year.

Claims against Jarvis will continue with at least 600 unfair dismissal claims likely to be made. Toni Haynes, of Morrish Solicitors, represented the members of the TSSA union at the tribunal.

"We are obviously pleased with the compensation offer - it is the maximum that we could have asked for," she said.

"Not all of the staff will receive all of that money, it will depend on their individual circumstances and what they have already received in other benefits.

"But what is clear is that the amount of money to be paid out of the public purse, is more than the £3m the administrators needed in the first place to keep the company afloat and these people in work."

- Reproduced with kind permission of The Yorkshire Post and Johnston Press

Right to strike?

I have written previously about the limited UK right to strike, and the political threat to change the voting threshold in ballots for industrial action.

Vince Cable now suggests that the Government will have to “get tough” on strike laws if the Union movement persists with the threat of widespread strikes in the Autumn.

We already have some of the most rigid anti-strike laws in the western world. 

And the reality is that in recent years the number of days lost to industry in industrial action has been at a decades-long low.  The Press love to report a good strike, but truth be told, there haven’t been many lately. 

The mere threat of an increase in industrial action seems to have set the hares running.  But what use are legal protections for strikers if, the moment serious action is threatened, the Government seeks to step in to prevent it happening?

I see no evidence of the Government taking a narrow view of the rights of individuals to protest in connection with the Arab Spring.  And whilst of course there are differences between those revolutionary protests abroad and industrial discontent at home, the bottom line has to be that what we can respect abroad we must respect at home; and if a right to protest is not a right effectively to protest, then it is no right at all. 

People do not naturally or quickly leap into industrial action.  They lose pay for every day they do not work, and in the long run they risk discipline and/or dismissal.  The veritable maze of booby traps that run as a thread through our anti-strike legislation have rendered it pretty difficult for Unions to organise industrial action at all.  If, notwithstanding the best efforts of the legislators, and the natural reluctance of workers to lose money, a strike is lawfully and properly organised, or indeed a series of strikes, the Government should be looking not at how to prevent that protest, but at the policies that have given rise to it.  

- Paul Scholey, Senior Partner, Morrish Solicitors LLP