Welcome news in the Telegraph today of a Government announcement on employment law promised later this week. Responding to widespread complaints from businesses and persistent campaigning by employers' organisations, the Coalition is to make some modest but important changes to ease the burden of complying with a massive, complex – and still growing – list of employees' rights.
In a straight copy of a Thatcher government reform, the qualifying period a new employee will be required to serve before acquiring the right not to be unfairly dismissed is to be extended from twelve months to two years. No word yet on whether the qualification period to acquire other rights and benefits will be similarly changed, but it's a start, giving employers a bit more breathing space.
More important, in my view, is the proposal to introduce an upfront fee for employees making claims through industrial tribunals. A modest payment, repayable in the event of a successful claim, would probably be enough to discourage many "nuisance" claims. At the moment the downside risk to an employee – or ex-employee – of embarking on a claim is minimal. For employers, however, the expense (in terms of company time as well as legal fees) of defending a claim often means that the only sensible business decision is to make a settlement payment, regardless of the merits of the case. Almost any business owner or HR department will tell you that this is their biggest gripe about the current state of legislation: they feel that even where they have acted properly, observed good employment practices and are confident of winning in Tribunal, they cannot "afford" to defend their case. A downpayment by claimants would, in their view, require the employee to think a bit harder about the prospects of eventual success before embarking on a claim.
It will be interesting to see what else is in the mix this week. What businesses would be very glad to see, yet which remains unlikely, is a rolling back of the new rights introduced under last year's Equality Act, especially the right for employees to claim against employers for allegedly discriminatory conduct by third parties, with potentially unlimited damages. Placing a cap on maximum awards would be a useful way to limit the impact of this legislation before it becomes a troublemakers' charter. Such a cap, combined with the promised downpayment and time limit changes, would do much to cheer beleagured British businesses and give them the confidence that this Government wants them to concentrate on productive activity and job creation.