18 May 2012

In the Queen’s Speech earlier this month (May 9th), the government reaffirmed its position on employment law, once again describing aspects of critical legislation as a “burden” on businesses.

Afterwards, David Cameron announced to parliament the Enterprise and Regulatory Reform Bill, which he claimed would “make Britain one of the most business-friendly countries in the world”. What he didn’t say – but we’ll say for him – is that it could also make work more dangerous and less secure for millions of people.

Proposals

The bill includes an “overhaul” of the employment tribunal system, a reduction in state inspections of workplaces, the scrapping of legislation and the strengthening of ‘sunset clauses’ on regulations, which makes it easier for them to be repealed.

Business Secretary Vince Cable said such proposals are “vital moves that would help strengthen the business environment and boost consumer and business confidence”.

The Institute of Employment Rights (IER) is in favour of the sensible consolidation of legislation if it helps trade union reps to keep on top of complex areas of law. But, we reject the government’s mission to “cut red tape” as we believe it leaves workers vulnerable. The coalition’s track record so far shows they have persistently valued ideology over working people, undermining laws that have been put in place to protect employees. For this reason, the Enterprise and Regulatory Reform Bill is a cause for concern.

Employment Tribunal reform

The Institute also believes proposals in The Enterprise and Regulatory Reform Bill will add to the government’s ongoing attack on the employment tribunal system, effectively restricting access to justice for workers.

Over the last two years, several measures have been brought in to make it easier for businesses to get rid of staff, including increasing the qualifying period for employees to claim unfair dismissal from 12 months to 2 years.

Additionally, in March, a public consultation was opened into plans to replace “unfair dismissal” with “compensated no fault dismissal” for micro-businesses – firms with fewer than ten employees.

Compensated no fault dismissal

Compensated no fault dismissal would mean employees could be sacked for no fault of their own so long as the employer pays them compensation. The worker would not be able to claim unfair dismissal unless they believed they had been fired for discriminatory reasons – for instance on the grounds of race or gender – or if they had been relieved of their duties for asserting a statutory right like requesting they be paid at the national minimum wage.

ACAS Code of Practice

Meanwhile, the ACAS Code of Practice on Disciplinary and Grievance Procedures could be put up for review. The ACAS Code maps out the process an employer must follow to deal with problems in the workplace, such as discussing the issue with the worker. An employer’s adherence to this Code is taken into consideration in an employment tribunal.

Now the government wants to “simplify” this code for small businesses, which could include taking out some of the steps bosses need to complete when resolving a situation in the workplace. Again, policy swings in favour of the employer and away from the rights of the worker.

The Institute of Employment Rights would like to highlight that the vast majority of businesses in the UK are considered small to medium enterprises and as of the start of 2011, almost 1 million of the 4.54 million private firms in the UK were micro-businesses.

Passing a law to remove the right of a worker to claim unfair dismissal against microbusinesses would, therefore, effectively remove the obligation to sack workers fairly from a huge proportion of British companies.

The consultation will end on June 8th 2012.