Since – as it claims – it ‘inherited the recession’, the coalition Government has come up with several culprits for the slow to non-existent growth of the UK’s economy over the past few years.
These have ranged from heavy snow stifling footfall at high street retailers to, more recently, complex employment legislation, discouraging small businesses from recruiting - compounded by lack of skills among recruits.
The Government can't control the weather, any more than it can control consumer spending, no matter how much it tries, but the crux of the Department of Business Innovation and Skills (BIS)' growth strategy over the past six months has been to encourage employers to take on new hires.
And one of the most controversial consultations to open has been the Beecroft Review. Proposals in the report by venture capitalist Adrian Beecroft suggested giving small businesses greater scope to dismiss employees.
In a nutshell, under the proposals, small businesses would be able to dismiss a worker, even where there has been no misconduct, nor any failure to perform to the required standard. The Government says small businesses are not expanding because of fear of being caught out by employment laws, in particular, unfair dismissal.
It wants to exempt businesses with fewer than 10 employees from complying with existing laws.
But even the Government is unsure whether this will be effective in promoting growth. Business secretary Vince Cable said: "One of Beecroft's recommendations was a suggestion to bring in no-fault dismissal. In my daily conversations with businesses, this has very rarely been raised as a barrier to growth."
And both unions and the HR profession have reacted strongly against the proposals. The CIPD branded Beecroft's proposals as "objectionable and unnecessary".
Mike Emmott, employee relations adviser at the CIPD, said: "We know employers don't spend all their time worrying about unfair dismissal claims. In fact, according to the Government's own research, unfair dismissal doesn't even figure in the list of top 10 regulations discouraging them from recruiting staff.
"It is objectionable, because it would be a licence for bad practice in managing people and damage the reputation of the whole micro-business sector.
"It is unnecessary, because employers facing a possible tribunal claim can already offer the employee a compromise agreement and tailor the level of compensation to the particular circumstances."
The TUC's general secretary, Brendan Barber, went further: "The clock is turning backwards. Already people have to wait two years before getting protection against unfair dismissal. The opponents of workplace decency, such as Adrian Beecroft, are using the economic crisis as an excuse to try to smuggle through attacks on employee rights. They say they are doing this for growth, yet Beecroft offers no economic evidence in support of his arguments beyond anecdote."
But Beecroft's justification is that it would allow employers a risk-free way of removing under-performing staff and being able to dismiss employees they saw as 'coasting', secure in the knowledge they would be protected by statute from unfair dismissal claims.
This is where Beecroft seems to agree with HR directors.
In December, HR magazine launched its campaign to banish the bureaucracy and crush the complexity within employment law. We have called for evidence as to the most complex areas of employment law and to mark the first half year of the campaign, held an inaugural meeting of the HR Crush Complexity Task Force, an eclectic mix of both public and private sector HRDs, employment lawyers and industry experts. When asked what was the most complex part of UK employment law, and the one issue HR professionals should move to address, the answer from our Task Force panelists was - you've guessed it - the dreaded employment tribunal.
"We try and manage our employment relations in a way that minimises the possibility of appearing in front of an employment tribunal", says Guy Pink, HRD of drug/alcohol charity, Addaction. "Any successful claim against us has to be identified on tender submissions, so it is vital we take all reasonable steps to mitigate this risk.
"However, there are occasions when it is a necessity that we resist, or in situations where the applicant is not willing to consider any alternatives other than proceeding towards a full hearing." But he added: "Our recent experiences of the system would indicate that the review needs to tackle systemic failings with the whole system."
Helen Giles, HRD at Broadway Homelessness and Support, adds: "It is not the rules of the tribunal or the powers accorded to judges that make the system so complex and unnecessarily costly, so much as the fact that judges fail to operate the powers they already have."
But what are the difficulties panelists faced when preparing for tribunals? Pink almost laughs: "We were presented with an ET1 application in a TUPE case affecting 48 members of staff, six weeks after this had been submitted to the Liverpool Tribunal. We discovered this had been sitting in someone's in tray for the duration - from December 2009 until January 2010." He continues: "We had a case listed in West Croydon on 28 February 2012. Upon arrival, the respondents' waiting area was full to capacity. It became clear that the case would be fortunate to be called that day. As it was, the tribunal started at 1.30pm, but by 5pm was only half way through. This necessitates a further day for all, not to mention the expense involved. The case was relisted in May, nine months after the dismissal.
"We had a case that was due to start on 2 January 2009. The tribunal contacted our solicitors to inform them there were too many cases and our case would be relisted. Fortunately, everyone was able to be contacted and prevented from travelling. However, the late notification could have had cost implications."
Panellists also listed tribunal inefficiencies, delays, late notification, pre-hearing reviews, inconsistencies between tribunals, cost hearings and discrimination cases as factors piling up the complexity to be crushed on the road to the verdict. "The guidance and instruction judges get make it the case that they will never throw out a discrimination claim, however thin the grounds," says Giles. "Discrimination claims cause the most expense and disruption, because they are invariably listed for days on end, however little the merit. This is borne out by the fact that a tiny percentage of discrimination claims (3%) are found in favour of the claimants. Time and time again, I meet employers who know they have not discriminated and have a watertight case, but that are forced to settle because they simply can't afford, not only the legal fees involved in fighting, but also the many days of management time spent in court when the organisation is facing major challenges getting on with its business." But she adds: "There is a belief among lawyers that judges must find more cases of discrimination upheld, as it is proving embarrassing in the statistics that so few are being found in favour of the claimant after the enormous expense.
"This is leading to more findings of 'unconscious discrimination', a frightening development. It is bad enough that centuries-old natural justice was turned on its head when the burden of proof in discrimination cases was put on the defendant/respondent (how can you prove a negative?). It is iniquitous that if you can't prove you didn't do it, then you must have done it and therefore you must have unconsciously discriminated."
One panelist believed, where claimants are not legally represented, judges go to inordinate lengths to assist the claimant, dragging out proceedings interminably and often leading the client and steering over into bias. He said many judges are reluctant to use their powers to award costs against claimants, however misconceived their claims turn out to be.
Tom Walker, an employment partner at UK law firm Manches, considered the tribunal process in his own legal capacity: "I don't like the adversarial tribunal system," he explains. "It is like a presentation in a lot of cases, where the best team wins - rather than the a proper study of the relevant facts… I would prefer an inquisitorial system."
Martin Tiplady, MD of Chameleon People Services, and former HRD, Metropolitan Police - which has faced more than its share of high profile tribunal claims - adds: "The employment tribunal process is not a legal process fundamentally and there is an argument it could be lawyer-free - are they just clogging it up?"
But when it comes to the complexities around legal preparation for a tribunal, Walker adds: "Although a tribunal can be intimidating, if when dealing with an HR situation, you act reasonably and follow natural justice, you should face the tribunal with confidence. "
But despite the complexities outlined by panelists, BIS says the number of tribunal claims continued to rise in the past year - numbering 218,000 in 2011, at a cost of £84 million to the taxpayer and costing an average £4,000 to the employer per tribunal.
The Government has moved to minimise the number of employment tribunals in several ways: extending the length of service from one year to two years before an employee can make an unfair dismissal claim, creating a £250 issue fee for employees ready to launch a tribunal claim and launching a pilot scheme earlier this year to increase workplace mediation prior to tribunals, in a bid to find solutions with employees over disputes before the need for legal intervention.
This has been designed to work hand-in-hand with the Acas mediation process. But speaking at the HR Forum in May on the cruise liner Aurora, Nic Hart, a partner at legal firm Davenport Lyons, said: "We all agree tribunals are not getting cheaper - but I think the two-year rule will actually lead to more complicated tribunal claims. With regards to the fees, trade unions are already amassing money to fund this for members." And panelists at HR's Crush Complexity taskforce agreed increased mediation would become nothing more than "another hoop to jump through" for employers on the complex road to tribunals.
"I have no confidence in mediation," says Graham White, HRD at Brighton and Sussex NHS Foundation Trust. "A decision has to be somehow enforced."
And Broadway Homelessness's Giles adds: "There is a tremendous amount of faith being put in mediation as a way of reducing the burden on the employment tribunal (ET) system and employers. But this is based on a notion that most cases arise simply from hasty and ill conceived actions by the employer, leading to resentments and misunderstandings that can be cleared up simply by having an impartial party to help resolve it informally.
"Our experience in the voluntary sector is that most employers bend over backwards to treat people fairly and reasonably through internal procedures, but are bedevilled by people who are intent on going to ET at any cost because they believe that they will get mega-payouts if they can make a case of discrimination stick. It is true many of them also believe the employer will settle at a large sum somewhere along the way, and mediation might facilitate this.
"But why should employers that have done nothing wrong be driven or facilitated into commercial settlements to avoid the cost of legal fees brought about by a system where people can make charges of discrimination without cost and are inevitably allowed to take it to full hearing? And so the employer will have to pay thousands of pounds to fight the case, even though no merit is ever going to be established."
As HR magazine was going to press, Cable announced plans to boost business confidence and ease the handling of workplace disputes by facilitating the use of settlement agreements between employers and employees.
Under these measures, employers would be able to offer settlement agreements before a formal dispute arose and legally protected from this offer being used as evidence in an unfair dismissal tribunal case. But, while the CIPD viewed this as an improvement on Beecroft, it voiced fears this could be seen as an alternative to HR performance-management systems.
Still, in spite of the Government's seemingly never-ending suggestions and consultations, our Crush Complexity task force agreed: a practical and strategic redesign of the tribunal system is the only way forward; and it is up to HRDs to devise the formula for change.
My agenda for change: David Smith, HR director, LV=
I really believe a 'fast track" small claims court equivalent would be beneficial to all three parties, ie the tribunal system, employees and companies.
Employees can sometimes make claims on the basis that a company will settle, no matter how strong their case, because the cost of management time and legal fees outweighs the sometimes lesser cost of making a settlement.
While some good work around awarding costs, mediation via ACAS etc has been positively received, it is not enough to sort out some of the issues present and more needs to be done.
Holding sessions whereby an individual and company representative present a three-page document on the merits of their case to a tribunal judge without costly lawyers present for smaller cases would be an interesting concept.
I am convinced cases could be reduced, ie the number of tribunal days required, with some type of cap around documentation being introduced.
This may require the tribunal system to make a change of direction from its existing format to providing some training around conducting these sessions - an investment that could pay longer-term dividends.
A meeting with the employment minister from a small sub-group of the HR magazine taskforce at some stage may be beneficial.
My agenda for change: Guy Pink, HR director, Addaction
My agenda for change: Helen Giles, HR director, Broadway Homelessness and Support
The HR Crush Complexity taskforce
HR magazine's plan of action
We have set out some HR directors' opinions from both the public and private sector. The next step for HR magazine will be to outline the consensus agenda - but we can't do this without your help.
Take a look at the suggestions from some of our taskforce panelists throughout this feature and email your own thoughts and suggestions to: firstname.lastname@example.org; or tweet us @hrmagazine and we will compile our manifesto for reform of the employment tribunal.
7 comments on this article
MA Business & Leisure Limited © Copyright 2013, All Rights Reserved
Send to a friend