July 19 2024
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Unsettled law

Unsettled law

Monday’s second reading of the Enterprise & Regulatory Reform Bill was a surprisingly bi-partisan affair, with not a single Liberal Democrat back-bench MP speaking in support of the Liberal Democrat ministers, Vince Cable and Norman Lamb (other than a very brief intervention by Simon Hughes).

From one side of the House of Commons, members of the Adrian Beecroft fan club rose, one after the other, to blame the dire state of the economy on the inability of employers to fire their workers at will.  And, from the other side, Labour MPs rose to warn against the ‘watering down’, in the name of economic growth, of workplace rights enjoyed by ‘every constituent of every Member of this House’.

As is often the case in the House of Commons, it wasn’t the most well-informed or considered of debates, but any objective observer would have to conclude that the Opposition came out on top.  For, whilst the Beecroft fan club members could do little more than spout anecdotes and dodgy statistics, Labour MPs were able to calmly cite supportive evidence and statements from those well-known lefties the OECD, the Engineering Employers’ Federation, David Cameron’s former speech writer, and the Federation of Small Businesses.  As the Labour MP for Bolton West, Julie Hilling, noted:

‘The Federation of Small Businesses is wholly against the [Beecroft] proposals for compensated no-fault dismissal.  It states it has no evidence from countries where compensated no-fault dismissal is in place to demonstrate that it encourages employers to hire.  In fact, it believes that it might lead to more employment tribunal cases on the grounds of discrimination, thereby producing exactly the opposite result to the main policy objective.  The FSB also believes that there is a risk of creating a two-tier labour market and, specifically, that lower protection creates a risk that workers will not be attracted to small companies, making it harder for them to recruit … [and] that that would fundamentally change the dynamic relationship between workers and their employers and could deflect attention from the need for good management and replace it with a hire and fire culture.’

Among Labour MPs there was general agreement that the Bill’s provision for more early conciliation of tribunal claims by Acas – with Acas in effect becoming the gateway to the employment tribunal system – is a positive move, so long as Acas is adequately resourced for the task.  As I noted in Citizens Advice’s briefing for MPs, the gateway must not become a log jam.

However, there was little mention from either side of the Bill’s worrying provision to cap unfair dismissal compensatory awards, and only one MP – the above mentioned Julie Hilling – expressed concern about the Government’s related proposals for substantial fees for tribunal claimants.

On the plus side, the Secretary of State, Vince Cable, made categorical statements that the Bill is ‘not about removing individual employment rights’ that he has ‘no truck with the idea of a free-for-all-and fire culture’, by which we can probably assume he meant ‘hire-and-fire’ culture, and that ‘we will most definitely not be proceeding in the way that [Beecroft] outlines’.

Since Monday, much media and blog comment has focussed on a new clause to the Bill, which Vince Cable indicated he would be tabling during Committee.  This is intended to ‘encourage greater use of settlement agreements and make it easier and quicker for employers – including [small businesses] – and employees to end the employment relationship my mutual agreement in a way that protects workers rights but helps businesses remain flexible’.

The yet-to-be-seen clause will therefore provide that ‘employers will be able to offer settlement agreements before a formal dispute arises and will be legally protected from this offer being used as evidence in an unfair dismissal [sic] case.  Employees will continue to enjoy full protection of their employment rights, as they can choose to reject the offer of a settlement agreement’.

Since Monday, BIS officials have confirmed to me that the limitation on adducing the settlement offer in any subsequent tribunal claim will apply only to unfair dismissal claims – so it will remain possible, for example, to cite the settlement offer in a discrimination-based claim. And officials have emphasised that the provision will cover only reasonable offers of a settlement.  So repeated settlement offers to harass an unwanted worker into signing an agreement would not be covered.  Which to my mind is greatly reassuring, but still leaves open the possibility of the measure being abused by rogue employers against vulnerable workers unsure of their legal rights.

Plus ça change, plus c’est la même chose.









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