Sara Ibrahim shows how reducing job security by weakening the tribunals system won’t decrease unemployment.
Sara Ibrahim is a barrister specialising in employment law
George Osborne’s plan A to stimulate economic growth has detoured into the realm of employment law. With a logic that it is hard to follow he declared that businesses would be encouraged to hire more staff by increasing the qualifying period for unfair dismissal claims from one year of employment to two. That way businesses can be comforted that vexatious litigants can’t get at them.
You see? Neither do I. Oh, and there is also going to be an issue fee which claimants can only get back if they win their case.
I am not alone in my cynicism. The equality and human rights commission confirmed in their response to the government’s consultation this year that the ‘efficiencies’ sought could lead to inequalities.
They expressed concern that men tend to have longer periods of service than women and that there could be indirectly discriminatory effects of this change. In any event, it ignores the fact that claimants can still issue discrimination claims without having to meet a qualifying period.
Despite this, there doesn’t appear to have been any consideration on the impact these policies will have. Not only will it squeeze access to justice, but also it could well dissuade those from low paid groups with good claims not to make them.
The uncomfortable fact is that women, young people and some ethnic groups are disproportionately represented among the low paid. In the words of Ed Miliband last week, we are not all in this together, as this latest announcement shows.
Given the cost of obtaining legal representation for tribunals, many claimants are often in person throughout. Making them pay to issue a claim as in the county courts ignores the usual imbalance between the employer and the employee. It could act to disincentivise all claims rather than those that are bad ones. Even if you do accept the government’s reasoning, then it is hard to justify why the proposed issue fees being mooted are higher than similar value claims in the civil courts.
Interestingly, Dr John Philpott, the chief economic adviser at the chartered institute of personnel and development, sees little merit in the proposal. He says that the evidence is that less job protection encourages hiring in boom periods but increased firing in bust periods. It therefore makes employment rates less stable during the economic cycle.
However, it does not change the fundamentals – the number of people in secure employment. He strongly takes the view that this will be detrimental for the long term prosperity of the economy by undermining any spirit of engagement between staff and management. It seems out a bad signal to people at a time when they are already feeling vulnerable.
Disputes in the workplace happen. The correct way to reduce claims is to increase mediation between the parties and ensure organisations comply with existing regulations. Preventing people from issuing unfair dismissal claims is a mistake. All it shows is a lack of commitment on the part of this government to access to justice and a disregard for the low paid.
If the coalition are looking for another policy to u turn on, this is it.
See also:
• Gideon’s grotesque attempt to blame workers’ rights for unemployment – Richard Exell, October 4th 2011
• The Right’s prescription of more of the same ignores the evidence – Nicola Smith, July 26th 2011
• Health and Safety cuts: Criminal businesses let off the leash – Steve Tombs and David Whyte, March 26th 2011
• Employment tribunal reforms will further erode workers’ rights – Ruwan Subasinghe, February 7th 2011
• Cutting workers’ rights will not increase employment – Nicola Smith, January 10th 2011
46 Responses to “Reducing job security won’t decrease unemployment”
Courtney Coriscouva
Reducing job security won't decrease unemployment: George Osborne's plan A to stimulate economic growth has deto… http://t.co/4QjXgosN
Awake!
yeah righto… the title flies against all common sense, but from a lawyer what does one expect? Whether it’s right or wrong we all know that when it’s easier to get tinned people do work harder, or if ther is higher unemployment also. What a twisted article… OR could it be that the employment barrister (who gets paid by the state i guess) is keen to encourage ‘mediation’ at every turn. Not for her the clear case of a dismissal, or accepting that people will abuse a free option…
very poor standard cos no balence.
Stephen
ablsolute codswallop – you have obviously never had to employ anybody – for small business these changes are a hurricane of fresh air!!!!!
Anon E Mouse
No one in the shadow cabinet has run a business and this silly article shows why.
Stop the press. A lawyer wants more litigation paid for by the taxpayer.
Wow there’s a first….
scandalousbill
Anon plus trolls @1 and @2,
Your responses ignore some salient points made by Dr Philpot of the CIPD who notes:
“Increasing the qualifying period for obtaining unfair dismissal rights thus runs the risk of reinforcing a hire and fire culture in UK workplaces which would be detrimental to fostering a culture of genuine engagement and trust between employers and their staff and potentially harmful to the long-run performance of the UK economy. Although the policy change will undoubtedly be welcomed by the de-regulation lobby, it isn’t the way to boost growth and jobs.
“In addition, it is unlikely that raising the threshold from one to two years will have its intended effect of reducing the number of employment tribunal claims because employees are increasingly bringing claims linking unfair dismissal with discrimination claims which can be made from day one of employment. ONS figures suggest that an extra 12% of employees would potentially be denied the chance to claim unfair dismissal due to length of service as a result of the change – hardly likely to make much of a dent in overall tribunal numbers given that only a small proportion of these would make any claim.”
http://www.cipd.co.uk/pressoffice/_articles/unfairdismissal031011.htm
Thus while the actual impact as estimated by the OBS is low, the political bias of employer organizations such as the CBI seems to have little basis in fact and more to do with a desire to enable management despotism. Only a breath of fresh air for those of very limited business capability.