Why employment law reforms won't work... And why they will !

WHY THEY WON’T WORK…

1. If a manager is unable to evaluate the suitability or performance of his staff within one year, there is little reason to suppose he will be better able to do it within two years. The extra year simply encourages an extra year of underperformance.

2. Litigation systems exist because people can’t or won’t settle matters amicably. Governments can’t force people – whichever side of the industrial divide they sit on – to be reasonable. They can only provide effective redress systems against unreasonable employers, and effective sanctions against unreasonable employees. The reforms don’t achieve either of those aims.

3. Compulsory mediation won’t help. Without substantial investment, Acas lacks the resources to do much more than hold a few telephone conversations, which it already does in the majority of cases.

4. Protected conversations will hurt, not help, employers. If an employer wants a frank conversation about poor performance, far better to do it on the record as it will help the employer defend any subsequent claim. If an employer simply wants to say, ‘we’re going to push you out unless you resign’, why should they receive protection from the consequences of their actions?

5. The reforms do nothing to eliminate the real problem of employees bringing unfounded discrimination or whistleblowing claims, which are more disruptive to business than unfair dismissal claims and which cost more to defend/settle.

6. Countries with more employment regulation have lower unemployment rates (and thus better economies). America – with almost no employment regulation – has 9% unemployment, contrasted with the UK’s 8%. The lowest unemployment rates in EU are Austria (3.9%), Netherlands (4.5%) & Luxembourg (4.8%) - all countries with far more ‘red tape’ than the UK.

7. Employers hire because they have too much work to cope with, or foresee making a profit on the cost of hire. They don’t refuse to hire because of a fear of a statistically unlikely tribunal claim several years down the line. The premise of Vince Cable’s reforms are wrong.


AND WHY THEY WILL…

1. Making it easier to dismiss means making it easier to hire. Today’s dismissed employee is tomorrow’s new recruit.

2. Employment tribunals dealt with 248,000 claims last year; they are highly expensive to run. Anything that can reduce the cost to the public purse is a good thing.

3. Introducing a compliance fine for employers who breach employment laws and lose a case at tribunal will encourage employers to settle claims rather than fight in court, which reduces the cost to the system.

4. Anybody can bring a tribunal claim, at almost no risk of having to pay any legal costs. When it costs an employer many thousands of pounds to defend claims, it means there is no level playing-field. Introducing a fee to bring a claim shifts risk and helps redress the imbalance.

5. Compulsory attempts at mediation through Acas will resolve a proportion of claims; sometimes the employer will recognise the employee has a point and be willing to settle, before the parties draw the battle-lines of litigation and entrench their positions.

6. Slimming down dismissal procedures means less cost to an employer when dismissing staff, and reduces the risk of ‘techincal’ unfair dismissals.

7. Portable CRB checks, which eliminate the need for a fresh application when moving jobs, will reduce cost and eliminate delay during the recruitment process.