Labour Research January 2012


Workers’ rights come under siege

It’s farewell to “partnership” as the Con-Dem coalition embarks on an onslaught on employment rights.

Remember the word “partnership” — the buzzword that accompanied New Labour’s swoop into power in 1997?

Partnership was the idea that employment relations (as opposed to industrial relations) were no longer a struggle for compromise between opposing interests. Because now we were all working together in pursuit of the common goal of increased national prosperity.

Well, partnership, the Con-Dem coalition has now made crystal clear, is dead. The ongoing attack on employment rights starkly illustrates the extent to which this government has allied itself to business and how, together, they intend to roll back any rebalancing of workplace power that employees have secured over the last few decades.

Slashing employment protection

Under the guise of improving the chances of job creation in a disastrous economic climate, the government is to slash employees’ protection from being sacked at employers’ whim. It plans to do this by:

• cutting workers’ access to employment tribunals by increasing the service requirements and introducing fees;

• allowing employers to intimidate workers in private conversations without any legal comeback;

• cutting the 90-day consultation period required for mass redundancies; and

• allowing employers in very small businesses with 10 or fewer employees to sack workers with no justification.

No wonder the plans have been described as “a charter for bullies and rogue employers” by the country’s largest union, general union Unite.

Its general secretary, Len McCluskey, said that ministers were “hell-bent” on “promoting a culture of fear in the workplace”. He added that David Cameron was “intent on kicking working people during the worst recession for a generation — but is too scared to tackle the real architects of the economic crisis — the bankers and the City elite”.

Employers’ organisations, on the other hand, are delighted with the plans. The British Chambers of Commerce (BCC), which has been working hand in glove with the government on employment reforms, said: “The BCC has long called for a reduction in red tape and a shake-up of the employment tribunal system, so we welcome the government’s reform proposals, which respond directly to business concerns.”

And Katja Hall, chief policy director for the Confederation of British Industry (CBI), said: “The government has listened to our concerns about how employment law is acting as a barrier to creating growth and jobs.

“With unemployment rising, we need to get on with these changes to give employers the confidence to hire.”

The plans are a mixture of ideas emanating from a review by venture capitalist and Conservative Party donor Adrian Beecroft, and a government response to an earlier consultation on Resolving workplace disputes.

Announced by business secretary Vince Cable in November, they are at various stages of readiness, with the first one, the two-year service requirement for unfair dismissal claims, coming into force this April (see box below).

Cable insisted that the plans to “radically reform employment relations” were part of “a comprehensive review of growth and how we can clear away the structural barriers to economic recovery.” He said that the government wants “to remove the perverse incentives” in the current employment framework “that can dissuade responsible employers from hiring new staff for fear of the costs and the time incurred if it doesn’t work out”.

The government’s top priority is to hack away at the protection provided by employment tribunals. It says it wants to reduce the number of cases coming to tribunal, which, it claims, are soaring, to reduce both the public costs of the system and the disincentives to job creators.

The government’s financial and practical case for this has been comprehensively debunked by unions and lawyers (see Labour Research’s sister magazine, Workplace Report, November 2011, page 15), while the moral outrage has gone even wider.

For example, the chair of the Administrative Justice and Tribunals Council, an independent oversight body sponsored by the Ministry of Justice, warned that the changes would “bring little benefit to employers or to the tribunal system while having a disproportionate and chilling effect on employees”.

Charging for access to tribunals

Nevertheless, the government is not stopping there. Even more dramatic is its plan that individuals should have to pay before they can access the tribunal.

According to Cable: “Introducing fees for different kinds of claim will encourage potential claimants to fully consider their cases — leading to more realistic expectations for individuals and greater certainties for employers.”

The Ministry of Justice is to publish a consultation on this “shortly” proposing two options.

The first option involves two payments: one to lodge a claim and a second to take that claim to a hearing. The second option proposes that individuals seeking an award of more than £30,000 will pay a higher fee than those seeking a lower award.

Cable did not give any indication of how high these fees might be. But press reports (that have not been denied by the government) suggest that, for claims for less than £30,000, there would be an initial charge of £250 to issue the claim, followed by a further £1,000 fee for a full hearing.

TUC general secretary Brendan Barber pointed out that, among other objections, such charging disproportionately hits low-paid and disadvantaged groups, such as disabled people, and said the level of fees proposed could end up “pricing vulnerable workers out of the system”.

"Protected conversations"

Another plank of the attack on tribunals is to introduce a system of “protected conversations” between employer and employee which could not be used in court.

According to Cable: “These will allow employers to raise issues such as poor performance or retirement plans in an open way, free from the worry it will be used as evidence in a subsequent tribunal claim.” A consultative document on this will be introduced early this year.

Employers again are very happy with the plan. The CBI’s Hall said: “Proposals to introduce the protected conversations we have called for will allow employers and employees to have frank discussions about future plans, without fear of ending up in a tribunal.”

The TUC, however, has described the idea as “hugely worrying”, pointing out that the role of consistent, transparent workplace procedures is to ensure fairness and reduce arbitrariness.

In addition, it could also give rise to bullying remarks being made by an employer in private which could then not be dealt with in a tribunal. As Barber said, the move “could simply provide the perfect cover for rogue bosses to bully at whim” without fear of being found out.

The plans for cutting tribunal rights have drawn criticism from across the union spectrum. The non-TUC affiliated Royal College of Nursing said: “If employment rights are reduced and if access to employment tribunals is restricted, we could see a growing number of unfair employment decisions and an erosion in the rights of staff.”

Dismissal procedures

Unmoved, the government is also looking at other ways of making it easier to sack employees, including “radically slimming down our existing dismissal processes,” as Cable put it. It will seek views on moving to “a simpler, quicker and clearer dismissal process”.

The government will also be seeking views on a proposal going under the clinical-sounding title of “compensated no-fault dismissal for micro firms”.

This would allow employers of 10 or fewer employees to dismiss an individual for no reason without fear of facing an employment tribunal, as long as they pay them compensation.

Applying this to micro firms only is more modest than the original suggestion from Beecroft, which would have had wider application. It took Tory grandee Michael Heseltine to persuade the coalition to modify the proposal.

He told the BBC’s Politics Show: “The sort of companies I understand don’t sit there saying, ‘by golly, we’ve got to be able to get rid of people, so therefore we mustn’t invest because the risks are too high’ … You invest because you think it’s going to be a success.”

Shortening redundancy consultation period

In a move that could impact on thousands of unionised workplaces, the government is also considering cutting the consultation period required before planned redundancies can take effect.

The period is in place to allow employers and employee representatives to consider ways to avoid as many of the job losses as possible, and even the government acknowledges that this has been used successfully to preserve jobs during the recession.

However, it has clearly heeded the calls of the CBI, which said that businesses “want to see quick action to reduce the collective redundancy period”. A call for evidence document published in November has a closing date for consultation on this sensitive topic as early as 31 January.

The wish to help employers enact redundancies more easily is restricted by the EU Collective Redundancies Directive. But the area that could be attacked is the UK’s 90-day minimum time period required for 100 or more planned redundancies. The government and employers have pounced on that one.

An introduction to the consultative document says some employers feel the 90-day period “slows their ability to restructure effectively and can put future business success at risk”.

This is disputed by the TUC’s Barber, who says the measure would have little impact on employers. On the other hand, he said, “it will make a huge difference to staff worried about their futures, increasing their stress at what can be a hugely traumatic time.”

Labour Research would like to receive any examples readers may have where the 90-day consultation has helped save jobs. Please e-mail these to: [email protected]

The government is trying to couch all these attacks on employment rights in the language of “helping the economy“. It has taken on lock, stock and barrel the rhetoric of the BCC, which said the reforms “would help companies create jobs and deliver growth”.

But unions, of course, know better. The CWU union, for example, said Britain was becoming “the employment rights dumping ground of Europe”.

General secretary Billy Hayes pointed out: “This government has brought non-stop attacks on working people despite the UK already having the weakest employment laws in Europe.”

He added that the new proposals “further corrode rights by stripping away job security and paving the way for unreasonable, profit-driven bosses to play with the livelihoods of hard working people.”

Government proposals and timetable

Confirmed measures

• Increase in service qualification for unfair dismissal claims from one to two years (see main text) — from 1 April 2012.

• All employee complaints to be submitted to the Acas conciliation service before they go to a tribunal to give an opportunity to resolve disputes through conciliation — will come in by April 2014.


• Fees for taking a claim to tribunal (see main text) — consultation to be published “shortly”.

• Protected conversations between employers and employees which could not be used in court (see main text) — consulting on the detail in the “new year”.

• Simplifying compromise arrangements (which allow the two sides to reach a no-fault settlement in exchange for an agreement not to bring future claims) — timing unspecified.

• Rapid resolution for straightforward claims — possibly with an independent legal expert reaching decisions based on written evidence — timing unspecified.

Seeking views/Calls for evidence

• Reducing 90-day period for making 100+ redundancies — consultation document published and finishes 31 January 2012.

• Compensated no-fault dismissal for micro firms, simplified and quicker dismissal process and simplifying TUPE rules — timing unspecified.

Proposals not yet at an advanced stage

• “Root-and-branch review of rules governing employment tribunals” by Mr Justice Underhill by end of April 2012.

• Merging, simplification or scrapping of 40% of the 159 regulations looked at in the government’s Red Tape Challenge on employment law.

This includes simplifying both the National Minimum Wage regulations and the paperwork involved in using agency workers.