Tuesday 15th July 2014

A one-day conference
UNISON, 130 Euston Road, London
9.30am - 3.30pm

Organised by the Institute of Employment Rights

The Enterprise and Regulatory Reform Act: impacts and effects

The Conference focused on this piece of legislation given Royal Assent on 25th April 2013 and looked at the impacts and effects on workers as a result of the changes to employment tribunals, whistleblowing requirements and health and safety regulations. Nerys Owen from the Labour Research Department chaired the conference and opened it by introducing the first speaker Roger Seifert.

Roger Seifert, Professor of Human Resource Management and Industrial Relations, introduced himself by saying he had no knowledge of the legislation but would be speaking about yet another piece of legislation rolling back the level of workers' rights. He put this rolling back into a political context by referring to increasing votes for the far right across Europe and described the Act as yet another way to "deregulate" the labour market.

He reminded the conference of when ACAS was set up as part of a class compromise at a time when there were more powerful trade unions. But now it is swamped with work that it struggles to cope with becoming a technical individual solution provider as opposed to being part of the original concept of being part of the collective bargaining system. He warned that this shift to individual resolution deskills the workforce and lends itself to the ultimate privatisation of this technical service.

Referring to the Act, Roger highlighted the three elements that the government sets out as the intention of the Act. These are earliest possible resolution of disputes, making ETs more efficient and effective and producing a more "flexible, effective and fair" labour market. Roger argued that these intentions were not being met and certainly would not have any impact on the labour market. He reminded us of the "Beecroft" debate and the rejection of no-fault dismissal. However, the hire and fire process remains unfettered by the zero hours contract, the part time industrial army and the lump.

Roger made the point that the huge pressure to individualise everything has weakened collective rights and has embedded inequality in the workplace. He placed this legislation in the context of seeking to provide fairness against the reality of workers' rights and workers themselves being subordinated in the world of business.

The next speaker was Rakesh Patel from Thompson Solicitors who examined the early conciliation process from a legal perspective. Rakesh started by providing an overview of conciliation and the purpose of early conciliation. He reminded us that this is not a new concept and that there was a previous Statutory Dispute Resolution process which was a disaster. This was followed by a new ACAS code of practice for grievance and disciplinary processes and eventually by Pre Claim Conciliation (PCC). The objective of PCC was to reduce the frequency of tribunal claims.

The purpose of early conciliation was identified as to resolve disputes at the earliest opportunity which was fair and equitable for both parties and to help businesses feel more confident to hire people. An attempted pilot of early conciliation in the North West was undermined by the introduction of the MOJ consultation on tribunal fees. This element created the prospect of employers holding back on conciliation whilst putting pressure on applicants to demonstrate the willingness to pay fees. Rakesh outlined the practical processes involved in the new early conciliation. Whilst the process appears reasonable in reality there are problems with the form and the first contact from ACAS with the applicant can be difficult if the applicant is not represented.

Rakesh expressed the view that the case for early conciliation had to be viewed in the context of other changes. The two year qualifying period for unfair dismissal claims, the cap on compensation and the introduction of tribunal fees all contribute to the effectiveness of early conciliation. He argued that when looked at in conjunction with the other reforms early conciliation becomes yet another barrier to claimants and employers are not showing any increased willingness to settle. The motive for employers is simply to avoid tribunals and not to necessarily improve working practices. He ended by saying that the only practical way to improve rights was for workers to organise through trade unions.

There followed a Q&A session which was started by a question on how to determine whether conciliation settlements are fair. No statistics are available from ACAS and therefore there are no means for determining the effectiveness or fairness of such settlements. Further questions addressed the resources for ACAS and its ability to retain their reputation for independence and there were concerns that the added pressure that the new rules were introducing may eventually undermine its standing.

After the break Elizabeth Stephenson from Pattinson & Brewer discussed the impact of the ERRA Settlement Agreements (or compromise agreements as we used to know them by). However, she started by referring to unfair dismissals arising through political opinions or affiliation and that the qualifying period of employment would not apply in these circumstances. She then turned to the compensatory award cap for unfair dismissal. Explaining the levels applied Elizabeth described this as completely unjustified and heavily biased towards employers.

On settlement agreements she reflected that the change of name was to remove the "compromise" notion that the applicant was giving something up and that "settlement" has a more positive connotation, even though they are still giving something up. The context of these agreements was the introduction of "protected conversations". Employers can now initiate such discussions without the fear that the employee may mention the conversation in a tribunal hearing. She described the ACAS code of practice which governs such settlements which includes a reasonable period of time to consider any offer of at least 10 days. However she has seen periods much shorter than this applied to employees and she advocated that wherever possible a trade union rep should be present at a face to face meeting to ensure that the worker understands that this is an offer and that the employer is not entitled to terminate the employment contract on the basis of the "offer".

Whilst the conversations cannot normally be mentioned in a tribunal that rule can be ignored where "improper behaviour" such as harassment, bullying and threats, along with discrimination and physical assault has occurred! The conversation can also be referred to if the employee has been put under unreasonable pressure. She also told the Conference that pre-termination negotiations can also be referred to on any question relating to costs and expenses.

The impact of these settlement agreements again must be seen in the context of other changes such as fees and early conciliation. She argued that more claims are going to be settled as a result. Unrepresentative employees are particularly vulnerable to such pressures. She also said that employers were increasingly offering these at a very early stage to avoid going through capability processes and that some were offering no more than the employee was legally entitled to.

Turning to financial penalties on employers, Elizabeth told the Conference that tribunals were more likely to exercise this discretion where the action was motivated by malice or had a record of such breeches. It was also more likely to be applied to larger employers with HR resources at its disposal.

Finally, Elizabeth summed up what might be included in a compensation award claim. She ended by reminding Conference of the tactics to be used in maximising claims against employers which included reminding the employer that unreasonable behaviour will be referred to the tribunal; suggesting that the claimant will ask the tribunal to exercise its discretion to apply a financial penalty; and seek independent advice from a specialist employment lawyer.

Conference then heard from Simon Cheetham of Old Square Chambers and a Part-Time Employment Judge on "Making Tribunal Claims friendly". Simon addressed the ways in which claimants and their representatives can advance their claims to tribunals to maximum effect. He defended the tribunal system which despite its flaws he argued that the majority of judges try to do their best to achieve fairness.

Simon argued that to start with it is best not to rely on the respondent having to raise a defence. It is important to highlight the strengths of the claim and prepare a response to the issues that you know will be raised by the respondent. Using some useful examples, Simon demonstrated that this shows the tribunal that you are aware of the issues, have confidence in the claim and allows the claimant a greater say in defining the issues. A further benefit is that it would help to avoid preliminary hearings which are rarely to the advantage of the claimant. Simon also warned against the temptation to load the claim with complaints and allegations. He argued that very often "more is less."

Turning to the calling of witnesses, Simon argued that it can be counter-productive to issue witness orders and that character witnesses are not really necessary nor, generally, are witnesses who were representatives at a disciplinary hearing. He also offered some useful guidance in preparing a witness statement and suggested that they should not exceed 10-15 pages. On the issue of bundles he reminded Conference that it should only contain documents that are likely to be referred to, but usually only a small percentage are actually read.

Simon told Conference that despite claimants often stating that the only reason for bringing the case is a matter of principle, tribunals are interested in remedy and want to know what the claimant is looking for. Therefore claimants and their representatives need to be clear about what they are looking for. Expectations need to be reasonable as this will demonstrate to the tribunal that the claimant was probably reasonable in the workplace. He suggested that it is helpful to assist in calculating pension loss and dealing with taxation of awards and also providing precedents for the value attached to injury to feelings claims.

For representatives contemplating a tribunal claim for a member this was a most useful guide to the right approach to preparing for such a claim.

More Q&A's followed these two speakers and covered issues relating to difficulties handling disability cases where the claimant suffered mental health problems; protected conversations and exclusion of trade union reps and the pressure of avoiding tribunal claims due to fees.

After lunch Steve Tombs from the Open University kicked off the afternoon session on the seemingly relentless reform of health and safety, most recently through the ERRA. He started by referring to enforcement trends of the HSE during the last Labour Government. These illustrated a massive decline in inspections, investigations into major injuries, and falls in the number of enforcement notices and prosecutions. By 2010 only a quarter of deaths which occur in the workplace result in prosecution although this figure excludes many categories such as self employed, industrial disease cases, or death through accidents to and from work.

In terms of staff in 2010 there were only 1400 inspectors for 850,000 premises. Environmental Health Officers have declined substantially and in some local areas disappeared altogether. Through a series of graphs Stephen was able to demonstrate a downward trend in inspections and prosecutions both by Health & Safety and Environmental Health Officers.

Stephen then moved to the period of the Coalition government and its approach to health and safety. This has manifested itself with an amount of rhetoric, legal reform and reviews of regulations. He illustrated this through the Institute's own published timeline and pointed to a long list of actions and rhetoric from the government. This list is worth looking up on the accompanying papers to remind ourselves of the extent of the attack on health and safety over the past 4 years. Stephen highlighted the lie of the "low risk" concept. This he argued the government uses to justify the withdrawal of pro active inspections. Such inspections are now banned in "low risk" workplaces which include - agriculture, most of manufacturing, education, electrical engineering, emergency services, prisons, quarries and transport. Studies also revealed that 53% of fatalities occurred in these "low risk" workplaces. He ended by describing the reform of health and safety as turbo charged.

Next Catherine Hobby, University of East London, posed the question “Are whistleblowers better protected as a result of the Act?” She described the government response in this area as mixed, some of it welcome, some of it indifferent and some of it damaging. Catherine put the issue of whistleblowing in context by referring to the definition and the divisiveness of this concept. She described whistleblowing as deliberate, non-obligatory and can be done by disclosing public interest information internally or externally or by making allegations of serious malpractice or wrongdoing. Catherine referred to the IER response to government consultations carried out in 2013 and went on to describe protected disclosures as enacted by PIDA.

She explained the remedies available include not to be subjected to a detriment and, if dismissed, it is automatically unfair and therefore subject to unlimited damages. The ERRA introduced three main forms to PIDA. Firstly the introduction of a Public Interest duty which places another burden on workers making it more difficult to claim protection for whistleblowing. Secondly she referred to the removal of "good faith". This she felt was a good move as the issue of motive should not affect the disclosure. However if the company demonstrates that a claimant was not acting in good faith compensation can be reduced by 25%. Finally the imposition of vicarious liability on employers was to be welcomed, making them responsible for detrimental treatment carried out by its employees or agents. The only defence for employers was for them to demonstrate that they had taken all reasonable steps to prevent such action, possibly by the introduction of sound whistleblowing procedures.

Overall, the actions of the government, Catherine asserted were, at best, piecemeal. Another change included a judgement in the Supreme Court which determined that a partner was a worker within the meaning of the whistleblowing provisions of the Employment Rights Act 1996.

Finally, Catherine talked about the government recognition that whistleblowing in the workplace is important. However she asserted that their actions have been both weak and limited. There will still be many occupations excluded from the legislation; there will be a non statutory guidance on whistleblowing and the extension of the proscribed persons will only be amended to include members of parliament. She quoted Lord Touhig, one of the proposers of the original PIDA legislation in which he stated: "in its current form, PIDA is dangerous for whistleblowers because people think they have stronger protection under it than they actually do. Catherine concluded that workers are not better protected by the changes that have so far occurred and a more fundamental reform is needed.

The final speaker was Hannah Reed from the TUC who presented an overview of the Act in which she described the impact of the ERRA. She commenced by stating that bosses had been enabled to make it easier for them to sack workers. ERRA enabled this through the new Settlement Agreements and the cap on unfair dismissal compensation. She admitted that the full impact of the Act was not really known as the legislation had been over shadowed by the effects of the introduction of tribunal fees.

Hannah then turned to the provisions of early conciliation. The TUC had received feedback from affiliates that most unions were seeking to use early conciliation. However there were real concerns that the way which government had introduced this practice including the need to put the correct name of the employer on the early conciliation form. In addition the rules had been tweaked in terms of multiple claims where every individual applicant may have to be identified and the need for multiple forms where there are multiple respondents.

Hannah then referred to the TUC's Respect at Work Campaign on employment rights. One of the main themes of this campaign will be stemming the tide of casualisation. This will include ending the use of zero hour contracts; campaigning for a better deal for workers; and equal pay for agency workers. She referred to the government proposal to ban exclusivity clauses from zero hour contracts. Whilst this was welcome in itself the proposal fell far short of what was needed and the TUC campaign for a better deal highlights the basic rights that are needed for workers on casual contracts. If addition the TUC recognises that what is seal so needed is better union representation and a right to collective bargaining.

Hannah then referred to tribunal fees and the TUC call for the abolition of tribunal fees as part of it’s campaign for better access to justice. The TUC's own analysis of the decline in tribunal applications illustrated that the biggest impact in this fall is on women. Hannah next outlined the TUC's new framework of employment rights which will provide unfair dismissal protection as a day one right; all workers to be entitled to redundancy pay; the restoration of collective redundancy rights and TUPE protections; and the creation of a new two tier workforce code.

Finally the TUC is promoting measures to improve collective bargaining, better information consultation rights and a worker voice on company boards.

In conclusion the Chair brought the conference to an end by thanking all the speakers who had contributed to a wide ranging and informative day.

Roger Jeary

Download conference papers

Chaired by Carolyn Jones, Director of IER

Roger Seifert, Prof of Human Resource Management and Industrial Relations
Acas in wonderland: making sense of nonsense
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Rakesh Patel, Thompsons Solicitors
Early conciliation: an opportunity or a threat?
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Elizabeth Stephenson, Pattinson and Brewer
Settlement agreements and the impact of ERRA on unfair dismissal claims
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Simon Cheetham, Old Square Chambers
ETs: making claims tribunal friendly
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Steve Tombs, Open University
The relentless reform of health and safety
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Catherine Hobby, University of East London
Whistleblowing reforms: are whistleblowers better protected?
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Hannah Reed, TUC
Reform and regulation: an overview from the TUC
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Click here to download the full programme