· 6 min read · News

Crush Complexity: decluttering employment law, four months on

Published:

Back in December, HR magazine declared the systems administering employment law in the UK were not working and launched a campaign to search for the solution.

With consultations over tribunal fees, TUPE legislation, protected conversations and the red tape surrounding employment legislation, the Government is meeting with individual lawyers, the CBI and legal bodies, while HRDs et al have been asked to post their suggestions or outline their responses.

Employers don't want to find legal loopholes to dismiss employees, they want staff to be engaged and productive at work. But they do not want to live in fear of tribunal claims, either.

So HR magazine proposed the formation of a taskforce, where HR directors, business groups, unions and Government sit down together and come up with solutions - after all, it is HRDs and CEOs in SMEs who will be dealing with legal issues in work at the coal-face.

Over the past three months, we have tirelessly worked to gather an amount of evidence to put a business case together.

So far, developments have been promising. Business secretary Vince Cable said he was willing to take a "more confrontational approach" to intrusive EU regulations, including employment legislation. Speaking at the EEF Manufacturing Conference in London on 6 March, Cable said he and employment minister Norman Lamb would be making a "concerted attack" on regulations that were damaging to growth.

He singled out the Working Time Directive. An extension to the directive, to be introduced in October, could mean workers will be able to gain extra time off if they are sick while on annual leave. It will cost employers more than £100 million a year, says the Government.

Cable told a packed audience of UK manufacturers the Government had a "good story to tell" on regulation. "The one-in, one-out regime is stemming the flow of new regulations and through the Red Tape Challenge we are identifying a substantial numbers of regulations for repeal or consolidation," he said. "Reaching for the statute book is negative and not good for business. The rush to regulate has been the default position in Whitehall for far too long; we want to change that."

It was at the BCC conference a year ago that Cable launched the Red Tape Challenge. He said this had begun the process of "drastically reducing" the number of regulations. There were 22,000 regulations and the Government, he said, is systematically working its way through them to see which ones are "outlandish and need to go". Of the 1,200 rules examined so far, 50% have been scrapped or simplified.

Cable said: "Most of my ministerial colleagues regard 'One In, One Out' as an absolute pain; every time they bring forward a fresh regulation, there is a big hurdle to cross. They say, 'I am 100% with you on fighting regulation, but you surely don't mean me? My regulations are good.'"

So culture change is not going to happen overnight. And, despite ongoing EU regulation in the area of employment law, Cable said: "We can't blame the EU for everything, convenient as that would be." So there are undoubtedly problems that have been created in Westminster rather than Brussels.

Moving onto tribunals, Cable said: "These, for many businesses, have proved to be bureaucratic, time- consuming and costly, even when they ultimately find in the employer's favour. The fear of tribunals has a particularly chilling effect."

The qualifying period for right to claim unfair dismissal will double from one to two years from this month. This will, according to the business minister, "encourage employers to recruit new staff and allow more time for these new relationships to take root.

"Taken together, these reforms are tackling the unnecessary red tape and bureaucracy, the excessive costs and the time wasted on lengthy employment tribunals. Our governing principle is to do away with perverse incentives that can dissuade responsible employers from hiring new staff for fear of what may ensue if it doesn't work out," he said. But he added he was "sceptical" about 'no fault' dismissal, making the point it is a balancing act. He stressed no decision had yet been made to go down this path for businesses with fewer than 10 employees.

"There are risks for millions of good, conscientious employees in denting job security at a time when economy and consumer confidence remain fragile.

"So we have launched a call for evidence on where the balance of the argument lies: whether dismissal might be made simpler, quicker and clearer; but without weakening the confidence and security of employees. We would only do so if there were strong and credible evidence to justify it. We are not making a decision based on dogma - either right or left. A balance needs to be struck between the argument that companies would take on more staff if it were easier to hire and fire and putting the fear of God in employees, which will ultimately damage employers." Cable finished by reminding employers that "on almost every measure, Britain has one of the Western world's most flexible labour markets and - compared with France, or even Germany - our laws are very accommodating to employers".

In January, the then employment relations minister Edward Davey announced the Government was prepared to "help employers help themselves" when it comes to law and legislation. Writing exclusively for HR magazine, he said: "We have unveiled a host of measures aimed at tackling the problem of tribunal claims. In addition to streamlining the tribunal to make it more efficient and less costly, we set out our proposals to encourage parties to resolve disputes without the need for judicial determination - by requiring all claims to go to Acas for pre-claim conciliation, and increasing the use of mediation in disputes.

"We take an approach that encourages employers and employees to resolve disputes at an early stage, avoiding the tribunal process. Quite simply, we want to help employers and employees to help themselves. Mediation has the potential to revolutionise how workplace disputes are handled, cutting out the lawyers, the tribunals and the courts. Although many practitioners are former lawyers, mediators do not necessarily need formal legal training and many new mediators are often former professionals looking to enhance their skill set."

The Government launched two mediation pilot schemes, to investigate how this strategy might reduce the numbers of tribunal claims in the UK (218,000 in 2011). But Davey has moved to the role of energy secretary, Lamb has become minister for employment relations and there is more to be done to crush complexity in employment law. The conversation with employers has to continue.

Elaine Neale, head of HR at food manufacturer Coldwater Seafood, says: "I applaud your campaign. My main issue is that although we operate within an ethical and moral framework and have a clear set of values, this completely goes out the window when dealing with our union. During the processes of discipline or grievances it works with us, which lulls us into a false sense of security, as its default position is to put in a tribunal case.

"Could you take note that the introduction of an 'upfront' payment for tribunals will not make a bit of difference to those of us dealing with unions, as they will pay this money for them?

"I would also ask that the rules around strike action and the ballot process be addressed, as in a previous employment, strike action loomed and only 20% of the membership voted, causing a great deal of stress to not only the company but to the rest of the employees who did not wish to be in that situation.

"We need a clearer and simpler law, one that should do what it was meant to do - for example, age discrimination. In my previous company, the legal team made us check our company shop to remove greeting cards that might cause offence. Scared of tribunals, grievances for this - rather than stamping out discrimination - is disgraceful."

Independent employment law consultant Richard Turner, who has completed his MBA dissertation on 'The hidden cost of employment disputes', adds: "I was very interested to read your series of articles calling for widespread employment law reform, instead of endless (mindless?) tinkering. I carried out a study survey of 350 organisations and interviews with senior HRDs/managers from across the spectrum of SMEs to FTSE-100 companies, along with meetings with senior ACAS and union representatives.

"Despite superficial disagreements, there was a remarkable level of consensus about the broader issues, which I believe is often lost in the rhetoric of party politics and media grandstanding.

"By way of example, employers complained of 'vexatious' claimants but, when questioned, they are most frustrated by misguided claims (such as employees bringing claims that patently have no jurisdictional basis, or claims for sums well beyond that which a tribunal could even award).

"Unions often decry the myth of vexatious litigants, but publicly acknowledge the existence of misguided ones. So the argument gets obscured by a semantic tit-for-tat which serves only to make both sides appear fractious and self-serving.

"If we could unite all parties in a common cause - simplification and clarification of employment law (which is not the same thing as a relaxation of employment protection) - it might be possible to trigger a revolution in employee relations. The key to this is educating people about their rights and obligations, eliminating some of the confusion before a dispute arises and emotions rule over logic.

"Educate children before they become employees, educate individuals once they become employees, educate employers and unions as a collective and perhaps a more enlightened, participative and understanding landscape could be forged. Let's get schools, universities, unions, trade bodies and even Acas or the employment tribunal itself working together rather than in opposition."

As you read this issue of HR magazine, the inaugural meeting of the employment law taskforce of HR directors will already have taken place in late March. We will report on progress following the summit in next month's issue. In the meantime, to keep the momentum going, please email your thoughts to: david.woods@markallengroup.com and follow progress of the campaign at: http://bit.ly/z13oJ9