As previously reported on these updates (find our previous article here), the Government is keen to make changes to employment law as it sees the current state of employment protection as a deterrent to recruitment and job creation. Further details of some of the Government’s ideas were announced last week.
Vince Cable, the Business Secretary, has confirmed that the qualification period for bringing claims of unfair dismissal will increase to 2 years from April. Although it is not confirmed, it seems likely that there will be no transitional provisions, so that employees who will have protection because (for example) they have 18 months’ service in March 2012, will be able to be sacked without cause or remedy in April.
The Government have also introduced consultation on the idea that small employers, that is those with less than 10 employees, will be able to dismiss employees without cause, irrespective of how long the employee has worked there. It is proposed that the employer will still have to pay the employee some compensation, probably calculated along the lines of statutory redundancy pay. Whilst this may be welcomed by some small employers, it will do little to give employees confidence in their future, and the evidence shows that the main thing preventing consumers (employees) spending is lack of confidence in the future. Given that the main motive given by the Government for these reforms is to help get the economy moving, it remains to be seen how effective they will be.
Vince Cable also confirmed the latest proposal, recently announced recently by David Cameron, to start consultation on the idea of “protected conversations”. The proposal is that both employers and employees will be able to ask for a protected conversation – what David Cameron called a “frank conversation”, which neither party will then be able to use in any litigation against the other. Examples cited include a boss having a discussion with an underperforming employee without them then potentially facing the risk of a constructive dismissal claim. We have some reservations about how this will work in practice, and also whether there is any benefit to either party in not being able to refer to this conversation. In this example, if the boss has grounds for alleging poor performance, there is nothing to stop him having a frank conversation now, and indeed any sensible employer would do so. On the assumption that the employer behaves in a reasonably sensible manner during that conversation, the risk of a constructive dismissal claim flowing from that type of conversation is very low. If the employee’s performance does not improve, then the employer is going to want to refer to the fact that it has previously been raised. It is unclear how having this type of conversation as a protected conversation will help the employer – because if the performance does not improve, they will not be able to refer to it in future.
It is also not clear how a protected conversation would differ from the current law on without prejudice discussions (see our previous article regarding without prejudice here).
As is the case in without prejudice discussions, it is also highly unlikely that allegations of discrimination would be protected – and any attempt to exclude them would almost certainly fall foul of European law. This could lead to the situation where part of a conversation is inadmissible in proceedings, and part is not. That presents obvious difficulties as, in practice, unfair dismissal claims are frequently bound with allegations of discrimination.
Will it be employers who will decide when a discussion is protected or will the employee have to agree too? If so, why would any employee ever agree to have an off-the-record conversation with his or her employer? It gives the employer a free hand to say what they like – for example, take a pay cut or I’ll sack you. The employee will not then be able to refer to this conversation in subsequent litigation.
However, it is not all one way. Will an employee’s actions during a protected conversation be beyond reproach, for example if the employee verbally abuses a manager, or will the protection only work one way?
As always, the devil will be in the detail, and at present we have no time frame for implementation. We will keep you updated on how this initiative develops and how the implementation of the other proposed reforms are to be introduced.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected])