Striking the right balance

When the Labour government came to power, employment law reform was inevitable. But many are now asking whether the Government has gone far enough in improving employee rights.

The agenda has moved on since Labour was last in power in 1979. When Tony Blair took over in 1997, many feared that New Labour – with its commitment to business-friendly policies on the one hand and its pledge to extend the rights of employees on the other – had wedged itself between a rock and a hard place.

Although some think that Blair's “radical, reforming” Government could have gone further in its improvement of employee rights, employment lawyers on the whole feel that a sensible balance has been struck.

Stephen Cavalier, head of the employment rights unit at Thompsons, says: “Those measures the Government has already put in place together with the proposals they are currently making have led to a significant shift in the balance of rights.

“We understand that the employers' federations, particularly the Confederation of British Industry (CBI), are still lobbying hard, but if the provisions in the Employment Relations Bill come into effect without too many changes, then we welcome it as a positive step in the right direction.”

Sara Leslie, head of employment law at Irwin Mitchell, says: “The Government has performed a very clever balancing act and I for one take my hat off to them.”

But celebrations are on hold until the Employment Relations Bill – the centrepiece of the new employment rights legislation – becomes an Act later this summer. The Bill combines domestic and European law and, as it stands at the moment, it will have a dramatic impact at an individual and a collective level.

Many employment lawyers see the trade union recognition rights conferred under the Bill as the most significant, positive and democratic step the government has taken. For example, under the new legislation if 50 per cent of employees in a workplace vote in favour of joining a trade union, subject to certain other exceptions, employers will have to recognise the union.

Leslie says one of the most important aspects of the Bill is that it gives employees the right to be represented by a trade union member in disciplinary and grievance proceedings. This provision is a key building block for a union seeking to extend its power base within a company.

“For trade unions to be recognised they must first get into the workplace to attract members. It is this representation right which facilitates this,” Leslie says.

On an individual level the period of time that a worker must have worked at a company before they can claim employment protection is to be reduced from two years to one. Under the previous Labour government the period was six months.

But Anthony Korn, a barrister at Barnards Inn Chambers, says: “One may have thought that a return to six months would have been more of an improvement.”

In unfair dismissal claims the maximum compensation award is to be increased from £12,000 to £50,000, although originally the government had decided to remove the cap completely. While the increase has been welcomed it still leaves a discrepancy between unfair dismissal and dismissal on the grounds of discrimination, the compensation for which is unlimited.

There will also be “family friendly” policies under the Bill. But while provisions for parental leave and time off to deal with “domestic incidents” are welcomed, Leslie says, “the government could have gone further and made this paid rather than unpaid leave”.

Charles Piggott, a partner at Hodge Jones & Allen, adds: “The Government has extended many of the rights to 'workers' and while this includes the self-employed it still fails to cover a significant number of casual workers working without continuity of employment.”

For some in the profession there are still areas of the law that need clarification. Korn, for one, thinks an opportunity has been missed.

“There are still areas of discrimination law where further legislation would be justified, including the introduction of class actions, age discrimination and a revision of the definition of indirect discrimination,” he says.

However, these concerns may be addressed because it seems likely that this Government will continue to review, reform and update employment legislation.