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Unintended Consequences

A red mist seems to rise from No.10 whenever employment law is mentioned. Ignoring the BIS consultation that closed in April but still has not produced a response from government, additional proposals have been floated by the Deputy Prime Minister and Mr. Adrian Beecroft. Many will be pleased at the thought that regulations may be made easier but all changes can have unexpected consequences and this is an attempt to spot some of them.

Mr. Beecroft has suggested either scrapping unfair dismissal entirely or replacing it with a fixed payment scheme that would entitle dismissed employees to a relatively small sum equal to a redundancy payment and notice pay. Employees would apparently have the opportunity to argue their case before the axe fell, but employers would have the ultimate say.

If unfair dismissal was scrapped then we will have two categories of employees in the UK. Workers and employees covered by the anti discrimination provisions of the Equality Act 2010 would all have a range of potential remedies when dismissed that other workers and employees would not. The risk here is that shop floor relations would be badly affected and more insidiously in the less scrupulous workplaces hiring practices would take into account the advantages of not recruiting those who might be protected by the Equality Act 2010.

Secondly, those old enough to remember the early days of unfair dismissal (or before it arrived) will appreciate that there is no doubt that that was a more savage world for employees. There is plainly a risk that widespread bullying by managers as well as arbitrary dismissals would result as they realised how difficult it is for employees to retaliate.

This would give the managers of such folk additional headaches. Mr.Beecroft anticipates this possibility, calling it ‘sad’, but thinks the price worth paying. However he may not have considered that one consequence might be that employees could resort to using the Protection from Harassment Act 1997 where proceedings would be in either the civil courts or the Magistrates’ court. That hardly seems an advance.

Thirdly although other European jurisdictions have a flat rate cash package alternative to our unfair dismissal regime they are all economies described (by our government) as being less flexible than ours.

Then again a lot of the problems of workers performing below the level they are capable of may well be as attributable to poor management as poor employment laws. This measure is unlikely to make life easier for those who want to encourage better management if the bullies come to the fore.

All of these risks need to be set against the cost savings in management time and the reduced need for HR and lawyers that the proposals may achieve.

Mr. Clegg’s contribution is to suggest that employers ought to be able to have ‘protected conversations’ with employees concerning their poor performance without fearing that what is said would be taken down, twisted round and produced in evidence to the tribunal. It is unclear whether this is to be limited to age discrimination cases or more widely applied. In either case he seeks an extension to the ‘without prejudice’ rules.

These are already very technical and the subject of heated debate as to their applicability in discrimination cases following the decision in BNP Paribas v Mezzoterro where the concern was that without prejudice conversations should not be used to cover up discriminatory behaviour. The essence of the rules at present is that there has to be a clear dispute in prospect. If this is to change primary legislation of a complex nature will be required. Another issue is that if there are to be parameters stipulating whether a conversation is protected or not then arguments will arise over this issue alone. In such a case a tribunal that resolved the issue in favour of the employer would be unable to hear the main case, as they would then be aware of the conversation. So the proposal guarantees, in such circumstances, two hearings.

None of these issues may be insurmountable but it would be foolish to legislate in haste as that always makes things worse.

This update is based on an article that was first published in People Management.

If you would like further information or to comment in general regarding this case, please contact Sejal Raja


This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.