23 April 2012
Confined by red tape
Some say the price we pay for a long period of peace is a long list of legislation and, certainly, the pendulum of employment law has swung over the last 30 years. In the 1970s, much employee protection came from Trade Unions.
With the decline of their power in the early 1980s, we saw a situation where UK employees were less protected than their European counterparts, as we had no comparable employment legislation to that in the EU. Successive governments have worked to fill this gap, but I believe the problem is they have taken a piece meal approach, producing a raft of legislation which does not always reference each other, and can be completely bewildering if you are not a legal professional.
Small businesses in particular can suffer – your average business owner wants to spend time running their business, not wading through the finer details of the Working Time Directive but the implications of not taking legislation seriously can be costly. If a business is faced with a claim of unfair dismissal, then you are not just faced with paying a fine, there is the hassle of finding a solicitor, and losing time from your business to attend a tribunal. Even if you win, your day in court could cost you thousands of pounds.
I also know that employment law dealing with dismissal of employees has a huge impact on businesses. Dealing with employee issues can be an absolute mine-field, and I believe employers will be very hesitant if they don’t know where they stand. I also believe that there are instances when Andy White, HR Manager at Haines Watts, believes that business owners can find themselves overwhelmed when trying to steer a course through the daunting sea of employment legislation. Employers can be too abrupt in dismissing employees, without realising that the law will not necessarily back them up.
One helpful thing to keep in mind is that the law tends to work on the basis of ‘reasonableness’. Lawyers will argue the ins and outs of what this actually means, but if you feel unsure in your dealings with employees, ask yourself if a third party would see your actions as “reasonable”. If you take a step back and assess the situation, I believe you can be more confident that the decisions you make are correct in the eyes of the law.
Another piece of advice I would offer is to put a formal six month probation period in place when an employee is first employed. This makes both parties review performance and issues early on. It also allows employers to cease employment during the probation period when the options to take the employer to tribunal are reduced.
As far as future trends are concerned, I believe that governments will want to be employer-friendly as they seek to stimulate growth in the economy and with standards of living falling across the UK, future governments will not want to introduce unpopular measures to the electorate. Employment changes over the next five years will be modest I think and designed to create positive political noise without much substance. One idea which would be of real help to business owners would be a central advice line where SMEs could get free independent advice on employment legislation and the regular changes to it. I do think on the whole though that the current government is trying to help employers.
Recently, legislation has been passed increasing the unfair dismissal term from one year to two years. There are also impending changes to the tribunal system, increasing the amount of deposit employees pay, from £500 to £1,000, to take a claim to a tribunal. The flip-side is that the costs a tribunal can award have increased from £10,000 to £20,000.
With the wave of employment legislation not showing any signs of abating in the near future, there are things employers can do to keep afloat rather than getting bogged down. Access the internet regularly to search for changes to the law and, above all, be sure to ask for advice if you are unsure on the detail.
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