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Enterprise bill ‘laying traps’ for both employees and employers

Proposed rules will make previous disciplinary procedures ‘look like a picnic’

22 June 2012

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Early compulsory conciliation, as proposed in the Enterprise and Regulatory Bill, will not ease the burden on tribunals or make the resolution of employment disputes easier, a group of MPs heard yesterday.

In an evidence gathering session that lasted for nearly five hours, the Commons committee scrutinising the draft law was told that the predication in the bill that the number of claims had been rising, was wrong.

John Morris, senior partner at Carlisle firm Burnetts and part-time employment judge since 2000, said this was not supported by evidence.

Statistics provided at a recent meeting with ACAS and the Tribunals Service showed that the number of tribunals had fallen year on year, except for multiple claims, equal pay and airline disputes.

The other two employment law specialists on the panel, Stephen Miller, of McRoberts, and Simpson Millar’s Joy Drummond, agreed.

Responding to the proposition by Iain Wright, Labour MP for Hartlepool, that “everybody seemed to agree that early conciliation was a good idea”, Drummond said the difficulty was not so much on the principle – including making the step mandatory – but in the method proposed in the bill.

As currently drafted, she said, the proposed rules were “unnecessary complicated, would lead to more litigation, more costs and management time for employers, not to mention placing additional hurdles in front of claimants with a valid claim”.

Drummond said the new rules would replace the current process involving one form within one time limit, which the tribunal sends to ACAS for possible conciliation, with two forms and two different time limits. “I can see all sorts of problems with that, both evidential and legal,” she commented.

She told MPs that the now-repealed and much-maligned disciplinary and grievance procedures that had to be followed before a claim could be brought to a tribunal and generated satellite litigation, would “look like a picnic” in comparison.

More employment lawyers

The panel also agreed with Andrew Bridgen, Conservative MP for West Leicestershire, that the tribunal procedure had become more complex, leading to a rise in the number of employment lawyers, but they rejected the suggestion that lawyers were to blame.

“It is true that cases get more complicated, but that is because the law has become more complicated,” said Stephen Miller. “Many claims offer different aspects to them and it’s no longer in the province of the ordinary lay person to comprehend the different dimensions of a claim. So that’s one of the features that calls for representatives.”

But Miller recognised that in relation to micro businesses – one of the main intended beneficiaries of the reforms – there was “a lot to be said for a more relaxed regime to spare them the rigours of long and difficult courts cases which can be expensive and have financial ramifications well beyond their means”.

John Morris added that in his experience as a tribunal judge there were “more cases where parties are not represented than there are with full representation”.

Meanwhile, Joy Drummond, while agreeing that the law had become more complex, said the bill would be counter-productive for small businesses and detrimental to more vulnerable employees.

Small businesses 'not always angels'

She accepted that small businesses had particular problems, “but in my experience the people who are most in needs of basic employment rights are often the most low paid, and they tend to be employed by small businesses”.

“Small businesses are not always angels,” she went on. “As an employer you have responsibilities – yes, that has to be balanced against being able to run a business and to hire people, but one of my fears with this bill is that in trying to encourage small businesses to employ it will lay traps for unsuspecting employers.”

Instead, she asked: “Is it not more responsible for the government to educate businesses about the traps and how they should behave rather than participate in and legislate on the basis of a myth?”

Drummond also criticised an amendment tabled earlier this week on protected offers and settlement agreements, saying it contained major flaws: their narrow scope – unfair dismissal – and the introduction of a test of ‘improper’ action for which there was no definition in employment law.

John Morris concurred that current practice and the use of ‘without prejudice’ rule were “adequate”. The amendment, he said, was “a trap for the unwary” and would create “great difficulties for employers”.

Good employers, Morris said, have conversations with employees about their performance and, if there is a dispute about performance, have the option to suggest resolving it without going down a formal process using the without prejudice rule.

Julian Smith, Conservative MP for Skipton and Ripon, said he felt as if he were “part of a Grimms fairytale with the employers being cast as the big bad wolf; it is highly biased evidence from many of you”.

The committee is expected to report by 17 July.

View video of the hearing

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Tribunals & Courts