November 25 2011 - Vince Cable, Business Secretary, announced on Wednesday a package of measures (some of which were already known) intended to
modify the way employers recruit, manage disputes and dismiss staff - while retaining key protections for employees. The changes include:
- Overhauling the employment tribunal process
- Introducing fees for people wishing to take claims to employment tribunals
- Requiring all employment disputes to go to Acas to be offered
pre-claim conciliation before going to a tribunal
- Consulting on 'protected conversations' - allowing employers to discuss issues such as retirement an poor performance in an
open manner with staff - without this being used in any subsequent tribunal claims
- Increasing the qualification period for unfair dismissal from one to two years from April 2012
- Seeking opinions on proposed compensated no fault dismissal for firms with fewer than 10 employees
- Slimming down dismissal processes
- Asking for evidence on the need for the 90 day minimum consultation period for collective redundancies
- Simplifying Transfer of Undertakings (Protection of Employment) - TUPE - rules
According to Vince Cable:
"Our labour market is already one of the most flexible in the world. This flexibility benefits businesses, staff and the wider economy. But many employers still feel that employment law is a barrier to growing their business.
"We're knocking down that barrier today - getting the state out of the way, making it easier for businesses to take on staff and improving the process for when staff have to be let go.
"But let me be clear: we are not re-balancing employment law simply in the direction of employers. Our proposals strike an appropriate balance and we are keeping the necessary protections already in place to protect employees. Our proposals are not - emphatically not - an attempt to give businesses an easy ride at the expense of their staff. Nor have we made a cynical choice to favour flexibility over fairness.
"We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business. Tribunals should be a last resort for workplace problems which is why we want disputes to be solved in other ways."
Ben Willmott, Head of Public Policy at the CIPD, commented:
"Genuine proposals to simplify employment law and reform the employment tribunal system are welcome - but where it comes to 'protected conversations' the Government needs to beware the spectre of unintended consequences.
"Plans to ensure that all claims go to Acas to be offered conciliation before going to an employment tribunal are sensible and will help reduce claimant numbers, as will plans to simplify the use of compromise agreements and to encourage greater use of mediation.
"However, proposals to introduce some form of 'protected conversation' to allow employers to discuss issues like retirement and poor performance without fear of a tribunal claim, while well meant, are likely to actually increase confusion among employers, add to red tape and generate additional legal disputes. By offering false comfort, the Government risks creating a field day for employment lawyers and a nightmare for businesses.
"In the same way, the increase in the unfair dismissal qualification period from one year to two years is a poor policy call. There is no evidence that it will have any significant impact on reducing the number of employment tribunal claims or support the labour market in anyway. Both these measures risk making excuses for poor managers - who will cost firms far more in the form of demotivated, unproductive workers than they will in tribunals.
"Failings in management and leadership that hit UK productivity and leave us lagging our international competitors are a far greater brake on growth than UK employment law, and the legally fraught idea of creating notionally 'protected' conversations and increasing to two years the period in which employees are not covered by unfair dismissal law, risk making a bad problem worse."