Lawyers slam government plans to restrict unfair dismissal claims
Employment lawyers have hit back at a leaked government paper that proposes abolishing unfair dismissal claims for ’unproductive workers’, stressing it would rob all employees of basic legal protection.
Samantha Mangwana
The paper, commissioned by Prime Minister David Cameron and written by Conservative party donor Adrian Beecroft, claims that under current rules workers are allowed to “coast along, secure in the knowledge that employers will be reluctant to dismiss them”.
Beecroft states that replacing underperforming workers with more capable ones would boost the economy.
However, Old Square Chambers employment barrister Anya Palmer branded the paper “an outrageous proposal”.
“It isn’t just about underperforming employees,” she said. “Any employee could be sacked and, unless they could prove discrimination, would have no right to compensation other than a small fixed payment. Beecroft says that’s a price worth paying. How many voters will agree?”
Russell Jones & Walker employment partner Samantha Mangwana believes the proposed changes would be counterproductive, stressing that the move would not help the economy “in any way shape or form”.
Mangwana added: “Encouraging unfair dismissals is likely to increase unemployment, not decrease it. Worse still, this proposal would allow employers to sack staff who are performing productively and effectively with impunity.”
Anna Birtwistle, an associate at employment and partnership firm CM Murray, added that in the long run it would be businesses themselves that would pay the price for the move.
“Directly in terms of people bringing more complex uncapped discrimination claims which carry a higher potential legal and reputational risk for the employer, and indirectly through the continued acceptance of inefficient management practices,” she explained.
According to the leaked government report the “terrible impact of the current unfair dismissal rules on the efficiency and hence competitiveness of our businesses, and on the effectiveness and cost of our public services” is a major issue for British enterprise.
In January, the David Cameron unveiled the coalition government’s plans to get Britain back to work by reforming employment laws. A proposed ‘employers’ charter’ wouldl mean that companies can sack workers during the first two years of their employment without the threat of being taken to an employment tribunal for unfair dismissal. Currently, workers who feel they are unfairly dismissed can make a claim after 12 months in a job.
In 2010-11 the cost to the taxpayer of running employment tribunals and the Employment Appeal Tribunal in England, Wales and Scotland was more than £84m but more than 80 per cent of applications did not result in a full hearing, according to the Ministry of Justice.
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Readers' comments (14)
Anonymous | 27-Oct-2011 11:01 am
Re. the 9.12 am post not necessarily any more so than Mr Beecroft, a man who I believe is involved in wonga.com selling loans at very high rates to people struggling in the downturn, producing a report saying employers should pretty much be allowed to remove employees willy nilly.
Simon is pretty much right here. Extreme positions and posts from both sides in this debate protecting vested interests. Something needs to be done to deal with vexatious claims by employees for certain. A costs regime in the Employment Tribunal and possibly also the imposition of fees (subject to exemptions as in the courts) as suggested could probably achieve that.
However that is one thing, a report like this seeking to pretty much remove all statutory protection would create a country I like many don't particularly want to live in. The point that in large part the economic crisis has been caused by venture capitalists, banks etc. rather than ordinary workers has already been made as well.
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Anonymous | 28-Oct-2011 12:24 pm
Stating that commentators are objecting to the proposals merely because they are protecting their own interests is misguided.
I am an employment lawyer. I am confident that there will be work for me whether or not unfair dismissal legislation continues in its current form. Don't forget, after all, that there are plenty of labour lawyers (and, presumably, work) in the US where there is no unfair dismissal regime.
All that will happen, in my view, is that claimants will increasingly rely upon discrimination in order to challenge any dismissal. Happy days for us lawyers, perhaps, with the increased fees that discrimination claims carry? Be in no doubt - vexatious litigants will continue to bring unmeritorious claims, regardless of the statutory framework on which they seek to rely.
My practice is pretty much 50/50 between employers and employees, so I do not express to have any preference. However, I do agree with previous posters about the negative effect on morale (and the economy) that dispensing with protection from unfair dismissal will have.
It is already easy enough to dismiss somebody. You just need to have a fair reason and to follow a fair procedure which effectively gives the employee an opportunity to defend themselves and put across their point of view. How can this be "crippling" business?
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Louise Maynard | 28-Oct-2011 3:31 pm
Poor performance is already a fair reason dismiss an employee. It is relatively easy to manufacture a poor performance by setting unrealistic performance goals and placing pressure on the employee to resign. Is it the government's suggestion that an employment tribunal simply has no jurisdiction to hear a dismissal labelled 'poor performance'?
Unfortunately, there is a huge stigma in this country relating to dismissals with a serious adverse impact on an employee's ability to gain suitable employment or any future employment. This places an additional burden on the welfare system. This stigma is already enough to make employees work hard to support their families and themselves and maintain their quality of life.
A dismissal has an tremendous adverse impact on an individual's quality of life including an in ability to buy goods and services, these same employers need individuals to buy their products and sevices.
Tribunal proceedings have a further adverse effect on an individual's future employability which I would suggest deters many individuals from bringing meritous claims.
With regard to the complaint of increasing Tribunal costs, all spurious claims should be struck out at a preliminary hearing.
I would like to see measures to secure greater compliance with employment legislation by employers and recruitment agencies.
We should also consider adopting the model applied by certain other European countries whereby an employer may not dismiss an employee without the sanction of the court.
In addition, we should give serious consideration to imposing fines upon employers and recruitment agencies for breaches of employment law.
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Sceptic | 1-Nov-2011 4:49 pm
" ... claimants will increasingly rely upon discrimination in order to challenge any dismissal. Happy days for us lawyers, perhaps, with the increased fees that discrimination claims carry?"
This sums up why lawyers like employment law to be as complex as possible - because they can then use it to screw money out of hapless employers.
All this po-faced stuff about protecting workers' rights might sound slightly more convincing if it wasn't being spouted by people who make a very good living out of exploiting the Kafkaesque nightmare that is current employment law.
Once we manage to reclaim powers from the EU the first thing that needs to be done is to scrap discrimination law. (For the avoidance of doubt I mean discrimination law as it's applied in the civil law, not the criminal law - I completely support the prosecution of racial crimes.)
Most decent people don't act in a discriminatory way, and those that do should face public opprobrium rather than legal redress.
I can accept that when it was originally brought in discrimination law did perform a useful function, in forcing people to see that discrimination was morally insupportable.
However, it should only ever have been seen as a temporary measure. As it's designed to modify thought patterns and improve the public's perception of minorities it should become unnecessary after, say, 20 or 30 years as by then discriminatory behaviour would be completely socially unacceptable, as is largely the case nowadays.
Peer group pressure is a much more effective and acceptable way of policing social interaction than the civil law.
The effect of providing a civil remedy, with thousands - sometimes hundreds of thousands of pounds - on offer for perceived grievances has the effect of making those minorities protected by such law appear to be a privileged few.
Such privilege serves only to increase resentment amongst the rest of the population - exactly the opposite of what was intended.
And the irony is that because of the absurd complexity of discrimination law it actively discriminates against small employers without access to HR departments or expensive legal advice.
I am personally aware of a number of small firms that have been hit with discrimination claims simply because they failed to offer interviews to job applicants, and who ended up settling what were completely spurious claims simply because they couldn't afford to defend the claims.
They will, of course, tell anyone prepared to listen about the gross injustice of such law, which again spreads resentment.
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