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2012: A Vintage Year for Employment Law?

The legislative weather forecast for 2012 augers well for a vintage harvest!

Successive governments, including the current coalition government, have promised to ease the burden of changes in employment law by minimising the number of changes and by making legislative changes only twice a year. However, Vince Cable’s latest speech on the subject, and the accompanying BIS press release, points to a bumper harvest for 2012. Vince Cable will no doubt justify this by claiming that it’s all good news for employers. Will the reality match the hype?

At Blacks, we have spotted at least 12 legislative or procedural changes proposed for 2012 which will either definitely be introduced, or may be introduced depending upon the outcome of consultation with interested parties.  The proposed changes which have grabbed the headlines are as follows:

  • Though this change has already been trailed in earlier speeches by David Cameron, there will be definitely be an increase to two years (104 weeks) in the qualifying period for unfair dismissal. Employers with a few grey hairs will remember that we have been here before. It seems the idea is to reduce (or, at least, postpone) the risk of an unfair dismissal claim and so persuade employers, in these recessionary times, to take on more employees and slow the inexorable increase in unemployment. The tactic may well work and will, no doubt, be welcomed by most employers. However, compared with the time when 104 weeks last represented the qualifying period for unfair dismissal, employees now have significantly more rights which are not dependent upon any qualifying period at all. So it seems likely that the restriction in the opportunity to make an unfair dismissal claim will prompt some employees to be rather more inventive in seeking to raise those claims (notably, discrimination-based) for which there is no qualifying period at all.
  • It seems that Tribunal claims will have to go to mediation with ACAS either before they are issued or, at least, before they are listed for hearing. The aim is laudable to the extent that it offers parties some saving in costs – though not, we forecast, as much as Vince Cable might have us believe. The practice difficulty is that ACAS is already over-stretched in its current conciliation role. Unless the government is prepared to commit the necessary resources, compulsory mediation seems likely only to delay claims whilst the parties wait for an ACAS mediation officer to become available.
  • There have been a number of cases recently where employers have misunderstood the “without prejudice” rule and have presented startled employees with draft compromise agreements marked “without prejudice” – under the misapprehension that the employee cannot refer to either the draft agreement or the conversation with the employer in any subsequent Employment Tribunal proceedings. The practical problem is that a discussion is only privileged from later disclosure (in other words “without prejudice”) if it constitutes a genuine attempt to compromise a dispute. If the first inkling which an employee has about his departure comes when a draft compromise agreement is dropped on the table in front of him, then, plainly, there was no dispute (before that moment) in respect of which the draft compromise agreement could claim privilege. The gist of the latest announcement is that, in practical terms, an employer will be able to initiate a conversation with an employee either about performance or, indeed, that employee’s dismissal, on the basis that it is a “protected conversation” – even where there was no pre-existing dispute between the employer and the employee.  In the past, some employers have successfully kept discussions away from the Employment Tribunal by agreeing with the employee that they should be held “off the record”, but the formalisation of this procedure under the label “protected conversation” is probably only a good thing. However, it has already been made clear that the protection which is to be offered to these discussions will not cover discriminatory acts. In other words, the change in the law will not protect the employer who is determined to make remarks which, under current legislation, would be discriminatory on the grounds of, for example, sex, race, disability and so on.
  • Currently, where an employer proposes to dismiss 20 or more employees or 100 or more employees then, before those redundancies are implemented, the employer must consult for, respectively, 30 days or 90 days. The government proposes to consult on reducing the 90 days period to 60, 45, or even 30 days.
  • There are circumstances in which a party to Employment Tribunal proceedings can be ordered to pay costs (usually for bad behaviour) or a claimant with a weak case can be required to pay a deposit as a condition of being allowed to proceed. Few orders for costs are made and deposits are rarely required. The outgoing President of the Employment Appeal Tribunal, Underhill J, is to carry out a review of the current rules – presumably with a view to increasing the frequency with which costs are awarded and deposits are ordered to be made.
  • In an Employment Tribunal the Employment Judge (a qualified lawyer) will be accompanied by two lay members, one a representative of business and one (usually) a current or former trade union officer. Depending on your political viewpoint, the composition of this “industrial jury” will lead to:
  • balance bias, or a hung jury
  • There may be a modicum of justification in each of these three views. However, it is a fact that where cases overrun and additional hearing dates need to allocated the challenge of matching the diaries of the three Tribunal members with those of the lawyers and the witnesses is likely to introduce depressing periods of delay. The proposal, therefore, is that unfair dismissal cases may well be heard by an Employment Judge sitting alone. Employment lawyers with very long memories will recall that modern employment legislation introduced in the late ‘60s has always been linked with the “industrial jury” and the aim of resolving employment disputes in a (relatively) informal, non-legalistic, way. Certainly, Tribunals have become increasingly legalistic, and at the same time their administration has moved from the business wing of the government to the Ministry of Justice, the home of “conventional” courts.  If lay members disappear from Employment Tribunals will they become courts by any other name?

2012 will be another busy year for employment lawyers.

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Richard Parr

Employment Law
0113 227 9246
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Richard Parr Blacks Solicitors LLP