23rd November 2011

Employment Law Reforms

It is understandable that the government wants to reduce the cost of the employment tribunal system. On the other hand employers and employees who use the system want it to be as efficient and user friendly as possible. It is by no means certain that the latest reforms will successfully reconcile these objectives.

The length of the qualifying period for claiming unfair dismissal has been a political pendulum since the right to claim was introduced in 1971. It has been two years before, and as little as six months. While the increase to two years will reduce the number of unfair dismissal claims employers should arguably not take as long as two years to identify underperforming employees.

The proposed introduction of fees for tribunal claimants from 2013 which the Chancellor announced last month is not entirely consistent with the concept of easy access to justice which the employment tribunal system was originally intended to provide. It would be an easy step for this to be extended to fees for employers who have to resist tribunal claims, and so employers should perhaps be cautious in welcoming this. There must also be a concern about whether the system of fees would be cost effective to manage.

The idea of early conciliation requiring all potential claimants to submit their claims to ACAS before coming to an employment tribunal is fine in theory but it will only work effectively if ACAS have adequate resources to deal with potential claims promptly and efficiently.

The proposal for “protected conversations” allowing employers to have frank discussions about poor performance with employees without the fear that they can be used as evidence in an employment tribunal seems an unnecessary complication. Employers should not be afraid to tell employees when they are underperforming and it is not clear why that conversation needs to be “protected”.

The call for evidence on the length of time required for consultation on proposed redundancies (with a view to reducing the period from 90 days in some cases to 30 days) feels like shutting the stable door after the horse has bolted, unless of course the government is taking a very pessimistic view on future growth and employment prospects.

The government are right to recognise that the best way to reduce the burden on the employment tribunal system is to resolve disputes within the workplace. It remains to be seen whether their proposals to encourage workplace mediation and to simplify and promote the use of compromise agreements will a achieve this.

Simon Allison
Partner – Employment Law

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