06 Feb 2012
I work for an organisation that tenders for service contracts from Local Authorities and the negative impact on us of the regulations as they stand has been enormous.
There is not a level playing field for competition for contracts since the most likely winners are always those that are prepared to take a gamble. The lack of clarity in the law means that they have a more than even chance of getting away with consulting to reduce the terms of TUPE staff from the date of transfer, and they enter their bid prices on this basis.
We are unable to commence redundancy consultation before the date of the transfer even though the services have been won on the basis of agreeing in advance with the Authorities that they must be re-shaped and slimmed down. The result is that we carry staff additional to complement for weeks after the transfer so the costs of running the contracts start to exceed the delivery price.
Most of the staff we have transferred in are great, but where there hasn't been a good match the costs and disruption of dealing with the issues and managing exits have been eye-watering.
And the worst thing about it is that TUPE really isn't any good even for the staff it's supposed to protect. They have to live with weeks of uncertainty before having the upheaval of transferring to a new employer, only to find out that they are going into a selection pot for redundancy with people from a range of other organisations that they don't know so they have no idea what they are up against.
The logistics in terms of job-matching and making selections are a nightmare for us and unsettling in the extreme for the staff. Particularly when existing staff who have been doing a great job and are told that as a result of someone transferring across who may have a claim to having done something similar in their old organisation, they have to go in a selection pool and are suddenly at risk of redundancy.
How much better it would be for everyone if staff could be consulted on redundancy and redeployment options before their outwards transfer, and be given the choice of either redeployment with their current employer or accepting a new job on the new terms that go with that in the transferee organisation.
There is little hope that the government, even if it does hear the reality of what is happening on the ground, will be able to do anything about it since a European directive is involved. But what a shame for us all that we are tied by the yoke of legislation that was dreamt up in the late 1970s aimed primarily at factory workers in a still predominantly industrial context. It simply isn't working for the infinitely more complex services-based economy of the 2010s.
This is music to the ears of people trying to run businesses or public services which incur enormous costs and impaired efficiency as a result of the disproportionate way these laws operate in practice.
John Philpott of the CIPD said this week that the perception that UK businesses are bound up in employment legislation 'red tape' does not stand up to an examination of the evidence. Pointing to an OECD research finding that the UK has the third least regulated labour market in the world, he goes on to say that 'It is time UK businesses stopped seeing red whenever employment regulation is mentioned and instead adopted a more balanced, evidence-based perspective'.
I would respectfully point out that Mr Philpott already had occasion to eat his words earlier this year when he went on record saying that there's no need for reform of the ET system, and shortly afterwards the CIPD's Conflict Survey of its members revealed that three fifths of respondents had had employees tagging discrimination claims on to unfair dismissal cases in the hope of achieving greater compensation while 55% reported complaints against their organisations on malicious grounds. The caption of the associated press release was 'ET System is Broken'.
Perhaps Mr Philpott should think about what constitutes a relevant evidence-base. I suggest that if he were to get out and about on the ground, as I believe ministers have been doing, to see and hear the case studies of employers struggling with the law and the way it is being applied by ETs, he might not be quite so undermining of what he describes as the "drive to deregulate" advocated by sections of the business lobby.
I have met and spoken with many small business people who have experimented with various ways - some ingenious and some reckless - to grow their businesses without employing staff because the costs and risks of being an employer so are so unmanageable. I have encountered others who have been driven out of business by one vexatious claim against them. For the most part these are people who are genuinely keen to motivate their staff and treat them well.
I appreciate that the CIPD doesn't represent small businesses since most of them are too small to have HR professionals on their staff even if they are brave enough to employ a workforce. But I'm a CIPD member, a director of an SME organisation, and I can't believe that I'm in any way unique in thinking that Mr Philpott's bold statements about employment regulation are so far removed from my daily experience of the reality that he is surely guilty of ignoring both the evidence and the interests of the people who pay his salary.
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