Easier to hire and fire?

Vince Cable has outlined the Government's response to recent consultations on various far reaching Employment Law changes, and taken the opportunity to add to the shopping list of pro-employer measures.

Dr Cable has restated the intention to raise the unfair dismissal qualifying period from one to two years from next April.  However, the Government has signalled that they are also steaming ahead with a range of other measures.  Those include making ACAS conciliation a pre-requisite to commencing Employment Tribunal (ET) claims. It also includes allowing employers to have "protected conversations", which cannot be used against them in subsequent proceedings, and which may alleviate some of the problems around the removal of the statutory retirement process.  The Government are also saying that they will consult on reducing the statutory minimum consultation period for larger redundancies from 90 to either 60, 45, or even just 30 days.

Taken together these proposals appear to tick several boxes from the Government's perspective, from the obvious political win of the pro-business message, to potentially reducing the number of ET claims, and the related cost to the Employment Tribunal Service.

However, needless to say there is Union opposition, and in particular concern that the increase in the qualifying period for unfair dismissal, well may encourage cynical employers to have a regular "staff churn" just short of two year service, particularly for lower skilled, replaceable, employees.  Younger workers may well be particularly adversely affected, and that fact may well prompt an age discrimination challenge to this proposal.  Last time we had a two year qualifying period, the Government faced a sex discrimination challenge, as statistically women had shorter periods of employment than men and so fewer reached the qualifying threshold.  However, that pre-dated the introduction of age discrimination, and politically, at a time of very high youth unemployment, one would have thought that an age discrimination challenge could be politically damaging.  However that may be tomorrow's problem, and for today the headlines may help the Government win back waning employer support. 

The ACAS "gateway" proposals for Employment Tribunal claims, are on the back of the successful pilot of Pre Claims Conciliation.  However, in the pilot ACAS has been able to be selective about suitable cases for PCC and spot quick wins - ie simple claims, where a couple of telephone calls nipped a potential claim in the bud.  This is a far cry from requiring them to conciliate every potential ET claim however complex.  Albeit that ACAS experience and assistance can be invaluable, there must be a real question mark about the effectiveness of this proposal unless it is matched with sufficient funding to enable, an already over-stretched, ACAS service to cope.

As an added deterrent to ET claims, the Government appear firmly resolved to press ahead with the introduction of Employment Tribunal fees, both to lodge claims,  with a likely additional fee before the case goes to hearing. This will be the subject of a separate consultation, along with a fundamental review of ET rules of procedure be commenced by the end of December. Proposals include a stricter costs regime, and various other ET process changes, all designed to encourage early settlement of claims.  There will also be a "Rapid Resolution Scheme" to enable simple claims to be settled within three months, and Employment Judges will sit alone in unfair dismissal cases, saving the cost of the current two "wing members".

The Government are proposing the above to deal with what they have described as the "dramatic" increase in the number of ET claims, and concerns expressed by a number of business representatives. However closer examination shows that the statistics are distorted by multiple claims in the system, some having to be relodged for technical reasons, and in fact the number of individual ET claims is declining. Ironically, the reduction in unfair dismissal claims following the rise in the qualifying period for unfair dismissal may well be matched by the likely increase in claims with no qualifying period of service, such as discrimination and whistle blowing.

There are also various other proposals, which will undoubtedly be welcome by businesses, including the promised portable CRB checks, so there is no need for a fresh application when moving jobs.  Of more debatable help to businesses are the more flexible maternity and paternity leave proposals, which may be difficult for employers to administer and track.  

Last but by no means least, the Government are still reviewing the option of compensated no-fault dismissals for "micro-business" (currently 10 employees or less, although that definition is also under review and may be reduced to 5 or less).

In summary, this is indeed a very significant package of reforms, which are likely to be driven through very quickly. Employers will therefore need to ensure that they are on top of the detail, including, as ever, the potential pitfalls for the unwary!