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”
Tia Junior
The PM seems to think that industry is riddled with underperformers that are dragging back growth or force their employers through time consuming and expensive tribunals when they have no case are are just angling for a settlement. I have however never seen any data that backs this up. On what information is the PM drawing – surely not just the “word” of a few business associates?
Ironically, the only area where I have generally found this kind of problem is in the public sector.
Yes, as always there will be a few chancers, but in my own extensive experience, the incompetence is far more with employers who either do not approach recruitment methodically, fail to make their expectations clear during and after recruitment and do not give employees sufficient guidance and support once in post. There is nothing wrong with the present legislation for a good employer and it encourages all employers to act responsibly – yes, the process you have to go through can be a bit frustrating at times, but this is a small price to pay.
This legislation effectively sanctions poor management and says “if you cock up recruitment, don’t worry just sack them and try again” and “you can legitimately dismiss someone completely unfairly without any worries”. What about the poor souls who have moved house, left their roots behind, changed their kids’ schools only then to find they are sacked on a whim with just the limited protection of an employment contract, with no parachute payments or any other safety net?
Does the PM honestly regard this as fair?
Staffordshire UNISON
Now Osborne defends his attack on workers rights re. employment tribunals – see @Sara_E_Ibrahim for why he's wrong: http://t.co/1gUE3NVt
Neil H
I’ve actually been through 2 tribunals as an employer. Both were redundancies handled with absolute integrity. The opporunity to fire people is not why people start businesses. It’s awful. We tried to be open , flexible and all the other good stuff the CIPD et al like to see. We’d already exhausted ,no overtime, reduced hours etc. In the real economy, where you need orders to make profits and create value added, if your costs are higher than your revenues, for long enough, people generally get made redundant. Both claims were dismissed. A small sample I know, but both claims were entirely unfounded.
E Azicate
Now Osborne defends his attack on workers rights re. employment tribunals – see @Sara_E_Ibrahim for why he's wrong: http://t.co/1gUE3NVt
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