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Fire at will – two years on from the Beecroft Report

Employer groups and trade unions agree that employment law and the tribunal system isn’t working.  Trade unions maintain that the introduction of tribunal fees and compulsory pre-claim conciliation has created a significant barrier to justice for many employees.  Even the CBI recognises that it is possible for unscrupulous employers to “game the system” in order to get away with poor treatment of their employees.  Unions will point to the 79% reduction in tribunal claims as clear evidence that the current regime is simply not working to protect the employment rights of the most vulnerable employees.

Generic you're fired

Conversely employer groups maintain that the system is still weighted too heavily against them. They maintain that the system is stacked in favour of the individual employee, that it remains difficult to effect a fair dismissal, particularly against a savvy employee who knows how to play the system, in terms of capability or disciplinary warnings, the clever use of fit notes or the whistleblowing legislation.

Employers would point towards the significant increase in whistleblowing claims as demonstrating that employees who have lost the right to claim ordinary unfair dismissal due to the extension of the length of service required to bring a claim, simply circumvent this by claiming a protected characteristic or alleging that their actions are protected under the whistleblowing legislation.

Employers also face the threat of additional punitive awards being made by tribunals of up to a further £5,000, in the event that employers unsuccessfully defend claims through to a tribunal hearing. Added to that, it is clear that tribunals are awarding issue fees against employers as part of a successful employee’s financial losses, and there is a significant fee for an employer to pay to appeal against any aspect of a judgment that they are unhappy with.

The government’s stated aim in introducing tribunal change was deregulation. The changes that have been implemented appear to be ‘deregulation by stealth’. Whilst there have been a drop in tribunal numbers, this has been achieved through the introduction of fees, clearly forming something of a barrier to justice. Forcing claimants to pay a fee does not prevent weak claims from being issued. However it does present a significant barrier to an impecunious employee with a strong claim.

Rather than deregulation by stealth, is it not time to revisit the most contentious element of the Beecroft Report, that of ‘no-fault dismissal’? The advantages of a no-fault dismissal scheme are obvious. Employers could dismiss employees for non-discriminatory reasons by simply paying a sum of money to that employee. The employee would not subsequently be able to bring an unfair dismissal claim. The employee would however retain his right to claim unlawful discrimination.

The sum paid to employees under a no-fault dismissal would be significantly higher than the current statutory redundancy payment and both parties would be provided with significantly more certainty, deregulating the employment arena and reducing tribunal claims at a stroke. No fault dismissal isn’t a system without flaws, but it should lead to greater certainty for both employer and employee.

For further details of no-fault dismissal please watch our thought leadership film

 

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further