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Latest developments on Employment Law Reform

31st March 2012

Two documents have been published by the Government recently, regarding employment law reform. The Government has put forward a number of suggested reforms to employment law. The latest Government documents, the BIS Employment Law Reform Annual Update 2012 and the Call for Evidence on Dismissal and Compensated No-Fault Dismissals provide further details of the suggested reforms.    

The documents note that reforming discrimination compensation awards is not going to be possible, due to the governing European Law that underpins domestic discrimination law. The concern that has been expressed is the fact that the law does not provide a limit in compensation awards for unlawful discrimination, unlike unfair dismissal where there is a upper limit in compensation that can be awarded. In the Annual Update 2012 the Government is proposing including details of median awards in the Tribunal claim forms. This is presumably to enable individuals to understand the sort of awards that the Tribunals often award  in discrimination claims. The simple fact here is that very few people have a knowledge of the size of awards that Tribunals actually make. Most people hear the extreme cases that reach the attention of the media. However, such cases are unusual by their nature in order to receive the attention of the media in the first place. After all, the basic measure of compensation is actual financial loss that has resulted from the discrimination. For a merchant banker in the City the losses will by much greater than those sustained by an individual on an average salary of say £26,000 per year. 

The Call for Evidence document proposes that both employers and employees will be able to commence "protected conversations". This is the proposal that an employer and employee can have a frank discussion about work and employment that will not be referred to in any subsequent Employment Tribunal case. We frankly do not see that the proposal of "protected conversations" actually helps employers or employees any more than provided under the current law. It is possible to have "without prejudice" dialogue between employers and employees under the current law when a dispute has arisen. This already enables the parties to have a dialogue that cannot be raised in an Employment Tribunal. If an employer wants to have a conversation that it can later refer to in a Tribunal to demonstrate that it has put the employee on notice of concerns over performance, in order to show that it has follwed a fair and reaonable procedure, then the "protected conversation" will be of no help at all!

It is noticeable that despite the fequent mantra heard that current Employment Law prevents employers from recruiting new staff, the Call for Evidence document suggest that on analysis of the answers given by businesses on regulation reform, that unfair dismissal is not even in the top 10 regulations that employers beleive deter them from recruiting more staff. The survey suggests that Health and Safety regulations are the greatest such deterrent. It appears to us that protection against unfair dismissal (which usually only arises after an individual has been employed for a full 12 months) deters employers from recruiting new staff. Surely a year is more than long enough to determine if an individual is any good at their job.  

At Hallett Employment Law we can give advice to employers and employees about the duties and obligations that apply to them under Employment Law. If you require any assistance on these matters do not hesitate to contact us.   

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