Government launches labour market review
Employment Law & HR update 07/11/2011
October was notable for a raft of announcements on the
employment regulation front.
- The chancellor, George Osborne, made two key
announcements on employment regulation in his speech to
the Conservative Party conference in Manchester.
- The Department for Business, Innovation and Skills (BIS) has
put the focus on employment law for the next stage of its
"red tape challenge".
- And to complete the trio of announcements, BIS has also
launched its strategy for employment regulation and its impact on
the labour market in a discussion paper titled "Flexible,
effective, fair".
So what are the announcements, what impact will they have on
employers, and what do they herald for the future?
What did George Osborne announce?
In his speech to the Conservative Party conference, George
Osborne made two key announcements on employment regulation:
- The qualifying period for a dismissed employee to make a claim
for Unfair Dismissal in an employment tribunal will go up from one
year's service with the same employer to two years' service from
1st April 2012.
- A system of fees will be introduced for employees to bring
claims in employment tribunals to "end the one-way bet against
small business". It is not yet clear when this will come into
force.
What is the "red tape challenge?"
Since coming to power in May 2010, the Coalition Government has
made it a key theme to reduce outdated or unnecessary regulation
that creates a burden on business.
In order to help it decide which regulations to repeal or amend,
the Government is asking employers to nominate laws they would like
to be removed.
For further details, and to add your comments, click here:
http://www.bis.gov.uk/news/topstories/2011/Oct/employment-law-red-tape-challenge
….And the labour market strategy?
This "discussion paper" sets out the Government's rationale for
reshaping employment regulation and its strategy for the
future.
Its key themes are that the labour market should be "flexible,
effective and fair". In practice, this means a "strong foundation
of employment protections" for employees, coupled with giving
employers "space to manage (their staff) effectively". Action is
also promised to reduce the "fear factor" among some small
businesses of taking on staff.
What impact will the changes have on
employers?
The extension of the qualifying period for unfair dismissal
claims from one to two years is aimed at reducing the "fear factor"
employers have of taking on new employees. However, in most cases
the current one year period should be sufficient to establish if a
new employee is right for the business, and in any case, claims for
any type of discrimination need no qualifying period of employment,
so the change may have little practical impact.
Similarly, the introduction of fees to bring employment tribunal
claims may have less impact than thought, as claimants in receipt
of benefits are likely to be exempt from paying the fees and some
types of claim are likely to be allowed without paying a fee.
What does the future look like for employment
regulation?
The signals are mixed. In some ways, government action has
created more regulation.
Since coming to power, the Coalition Government has implemented
the Equality Act, the Agency Workers' Directive and has abolished
the default retirement age – all of which, it can be argued, place
new burdens on employers. The Government has also made it clear its
aim that employees will always have a "strong foundation of
employment protections".
Additionally, in practice, it is likely to be very difficult to
put the genie back in the bottle and to reduce existing protections
and rights for employees, not least because amending the law is
time-consuming and often has unintended consequences.
The coalition is also tied in to a "family-friendly" workplace
agenda that was conceived in less austere times – so there are
still proposals on the table to completely overhaul the current
system of maternity leave and replace it with "flexible parental
leave" and to give all employees the right to request flexible
working arrangements.
But there are some more promising areas for employers.
The first is the pretty comprehensive scheme of proposals to
keep cases out of employment tribunals and to speed things up and
reduce costs when they get there as outlined in the "Resolving
Workplace Disputes" consultation paper earlier this year. Many of
these proposals are likely to be introduced, especially as they
will also cut the cost of running the employment tribunal service
at a time when public spending is in the spotlight. Employers may
increasingly need to look to alternative methods of resolving
disputes, such as mediation.
Secondly, removal of the "gold plating" of European law around
employees' rights upon the transfer of undertakings (TUPE) seems
likely to happen, and changes have already been made in the area of
public sector outsourcing.
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