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Should employers fear employment law?

PUBLISHED: 11:49 08 August 2012 | UPDATED: 21:42 20 February 2013

Should employers fear employment law?

Should employers fear employment law?

Darren Sherborne doesn't think so, but be wary of some changes

Should employers fear employment law?

Darren Sherborne doesnt think so, but be wary of some changes.

Employers have been delighted with the recent changes to employment law, and more are proposed. The qualifying period for unfair dismissal has risen from one year to two years as of the 6th April, but only for employees who start after that date. Therefore there will be no real change until April 2013.

Many more changes were heralded this year, although employers could be forgiven for asking whats in it for them and with good reason. There is a clear message that employees wishing to enter tribunals will have to pay a modest deposit. The figure is not yet clear but it could be up to 1,000. That is up to and not always that figure, and more likely to be between 200 and 500. Its also likely to be means tested. On the basis that most unfair dismissal claims are brought by people who by definition have not got a job and therefore are going to be a bit short, its hard to see that this will have much impact.

What no one seems to have noticed is that there is an intention to bring in financial penalties for employers who fight tribunals and lose. This money will go straight to the government. One could be forgiven for thinking that the aim of these moves is to encourage employers to pay employees off rather than minimise claims in the first place or ease the burden on the economy. I would perhaps be able to dismiss such a cynical conclusion, except that the government will also introduce a compulsory period of conciliation with ACAS before the claim can be heard by a tribunal. Once again a measure that will, without doubt, encourage employers to offer financial settlement to aggrieved staff.

Experience would suggest that where an employer routinely settles employment claims, that employer gets more claims than employers who fight them and this applies to Small Co limited as much as it does to UK PLC. Im not suggesting that ACAS involvement in tribunal cases is a bad thing, it isnt, but to focus on encouraging employers to pay employees off rather than addressing what brings employees to tribunal in the first place cannot be the way to go. This is without dwelling on the fact that where you force two parties to talk against their will, the result of that conversation is not going to be noticeably positive. I certainly cannot see this approach catching on in divorce cases!

Few employers are downright bad, in my experience. They are trying to run businesses in a tough climate and have to make difficult decisions for the good of the business, sometimes with employees working against them or thinking they know better without actually having the responsibility. What encourages tribunal claims is usually money. That has to be right. If tribunals awarded bags of carrots we would be making tribunals redundant.

The problem at the moment is that tribunals award damages to employees based on how long it will take them to find a new job. While this has a logic to it, when the economy is in recession, and businesses are finding it toughest to make ends meet, the jobs market is also tough and employees take longer to find more work. Therefore, just when commerce is struggling most, unfair dismissal compensation goes up! You have to admit it is not ideal.

Its not all bad news. Quite a small percentage of unfair dismissal claims end in a finding in favour of the employee. Employers seem to win more than they lose. It seems a shame that so many employers get the impression that the employee has the upper hand and that really is not the case at all. Perhaps employers get advice that is too cautious, or get advice too late and end up tip toeing around situations quite unnecessarily.

In any event, the current changes are unlikely to make a big difference because they dont tackle the real issues, which are employers being advised to be scared and the prospect of (and myth in most cases) of large damages awards.

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