Small and medium-sized businesses squeezed by the recession have been calling out for a more straightforward, efficient and less bureaucratic framework for employment law in the UK. These cries have now been answered with plans which allow for a renewed focus on growth in the SME sector.
On the anniversary of the election of the Lib-Con Coalition government George Osborne announced plans for a “wholesale review” of employment law and proposed to support his austerity budget with employer-friendly proposals aimed at encouraging recovery and driving down unemployment.
His plans include capping tribunal awards for discrimination in the workplace, targeted at high profile claims where compensation has reached upwards of £440,000 for sex discrimination and as much as £730,000 for disability discrimination.
The review is also set to consider introducing fees and rules to limit vexatious claims being brought by disgruntled employees. This would see the Tribunal adopting a regime similar to that of the other civil courts where an upfront fee to lodge a claim is expected to put off a significant number of claims. As it stands, an employment judge may order the employee to pay a deposit into the court if their claim is considered to have ‘little prospect of success’ but this sanction is rarely used.
Other proposals include;
simplifying the administration of the National Minimum Wage regime,
reducing the collective consultation period for redundancy from 90 to 30 days,
a shake up of the protection of employment rules,
a general review of the awards and sanctions available to the Tribunal.
So what does this mean for the employee?
Unions and employee opinion groups have raised concerns that this will entitle employers to “hire and fire at will” and that the scale of the proposals amount to a “bonfire” of employee and union protections. It is unlikely that the Coalition would want to be seen as dramatically anti-employee but certain proposals are likely to create a fear of uncertainty and reduced protection from dismissal and discrimination.
It is interesting to note that in reality the proposals will be difficult to implement given that discrimination and TUPE are fundamentally embedded within European legislation which is not up for discussion.
Business groups who support the move to encouraging a modern ‘flexible’ approach to employment are now awaiting Osborne’s timetable for the review whilst critics say that it may never come.
For more information please contact Malcolm Gregory of the Employment Team.