The government is making good on its promise of a ‘red tape bonfire’. Business secretary Vince Cable has revealed radical changes to employment law that are set to save business leaders around £40m.
So what’s changing? Firstly, the government wants to push through new legislation regarding ‘protected conversations’, allowing employers to talk to their staff about poor performance off the record. This will reduce the amount of evidence that employees filing for unfair dismissal will be able to bring to their tribunal.
Government also wants to dramatically slash the amount of time it takes to settle job disputes with a new ‘rapid resolution scheme’. This is a two-pronged attack on costly, protracted claims. All new claims will now be automatically referred to Acas, the conciliation service, before reaching employment tribunal. If Acas thinks that the claim is groundless, it will be junked with zero bother to the employer. If the claimant does have a valid case, the dispute will be resolved within three months.
In addition, from April 2012 staff will only be able to bring their case to tribunal if they have worked for their employer for two years or more. The current legislation stands at just 12 months.
The 90-day consultation period for redundancies is also destined for the scrap heap. Government wants to reduce this time period to just 30 days to reduce the financial burden on UK firms.
Unions are up in arms over the proposals (‘This will just sweep abuse under the carpet,’ says GMB union leader Paul Kenny), but Vince Cable insists that this is simply a move to cut ‘unnecessary bureaucracy’. This isn’t a war on ordinary people, it’s a recipe for growth, he says.
There is definitely evidence that employment legislation is out of control. Employment tribunal cases have shot up 40% over the past three years - 218,000 claims were received in 2010. And it costs a business around £4,00 to deal with each claim. No small change. So, are bosses really getting worse? Or is it simply too easy to accuse your employer of wrongful dismissal?
Cable believes the latter: ‘We want to create an environment in which entrepreneurs want to start businesses, expand, take on staff and feel confident that they can do that and, if they run into difficulties with a particular employee, they can have a conversation with them without worrying they are going to be taken to a tribunal,’ he says.
With overwhelming support from the CBI and the British Chambers of Commerce, it’s clear that the UK business community is delighted. But anyone out there who's considering taking their employer to an industrial tribunal better get on with it...