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| Tim Randles |
Tim Randles of employment law firm Laytons looks at what the coming year has in store for employers In recent years, a common complaint from the in-house lawyers and HR professionals whom I have the privilege to advise has been the haphazard and uncoordinated way that employment legislation has been brought into force. The Better Regulation Task Force agrees and in 2002 produced a report entitled “Employment Regulation: Striking a Balance”.
The result of their efforts has been a decision by the DTI to introduce employment regulations (or at least those for which it has responsibility) on what it describes as “Common Commencement Dates”, which are to be April 6, the start of the tax year, and October 1, when the minimum wage is revised.
This comes as a relief, not least because a considerable body of recent employment legislation has had such an impact on business that it has had to look very hard at its training regimes in preparation for the new laws, only to find that the legislation has already come into effect or the proposed date delayed, often without a word being said.
That is not to suggest that some legislation will not be postponed but an early visit to www.dti.gov.uk/er/regslist_2004.htm will be worthwhile. Things will begin relatively quietly in April (unless you are an employment agency for whom new Regulations have serious ramifications) with the introduction of regulations to amend the National Minimum Wage to introduce a new fair piece rate regime and some regulations regarding maternity leave and paternity, which the DTI describe as “technical amendments to fine tune the operation of the new laws for working parents introduced in April 2003”. As ever, this slightly understates the case.
Things will definitely hot up a bit in October, however. A new ACAS Code will be published dealing with discipline and grievance procedures and the Dispute Resolution Regulations under the Employment Act 2002 will come into force. For the first time model, disciplinary dismissal and grievance procedures will be enshrined in statute and will have to be followed by all employers.
The DTI provides useful information on its web site and is to be applauded for the way the site has developed. My only complaint is that it is rather underplaying the effect of these procedures. Not only are we seeing the creation of statutory disciplinary and grievance procedures, but also a new “automatic unfair dismissal” ground and employers who do not follow the correct procedures may see the Tribunal awards increased by up to 50%.
Inevitably, the business mindset will have to change and, because the cost of failure will be even higher, there has probably never been a better time to start thinking about how to train your management and to address the problems posed by the new legislation.
Employment rights have been with us for a very very long time. It was therefore all the more astonishing to find at the recent Laytons’s Employment Conference, both company lawyers and HR professionals complaining bitterly that they still encounter problems explaining employment rights to their senior managers, many of whom see them as a hindrance which need not apply to their staff. Too many businesses will learn a painful lesson in the Employment Tribunal if they do not change the way they think and handle disciplinary issues in the work place. The real truth, however, is that so many businesses let their managers learn about employment law on the job, rather than by giving specific training. Odder still, most businesses have lawyers but never even think of asking them for this type of help.
The cost of prevention is tiny compared with the cost of litigation. With the compensation threshold rising every year, there are real incentives for applicants to take their case the distance. The sheer cost and inconvenience to the employer is now reaching prohibitive levels and yet few offer structured employment law training to their managers. Whilst there are always risks to litigation, because of the procedural nature of the employment legislation, the outcome of employment disputes can often be better predicted where procedures have been followed. Whilst I hesitate to descend into cliché, it still remains the case that prevention is far better than trying to find a cure and that will most certainly be the case once the new legislation comes into effect.
In fairness to the government, these regulations will be introduced at a time when they are also introducing new regulations to modernise the Tribunal procedure in order to increase incentives to look for alternatives to litigation. These will include deciding whether a claim should be accepted, but by the same token, a similar procedure is going to be applied to the Respondents. There will be new forms requiring both parties to share more information earlier in the Tribunal process. These are no guarantee of success however. We have all been here before and the sad truth is that the more legislation there is, the more opportunities for claims.
If claims are brought, companies will have to be a great deal better prepared. Meanwhile the ability to recover costs, made far easier in recent years, has just taken a knock in the Employment Appeal Tribunal as pre-action costs have been ruled irrecoverable.
Whilst prevention is therefore in everyone’s interest, it is only going to be achieved with training and by encouraging and empowering managers to follow procedures and deliver the right results.
“Ah”, I hear you say, “He would say that wouldn’t he?” Well, I’ll let you into a secret – I make far more money litigating but spread much more happiness helping to avoid it. As always, I’ll let you choose!
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