Norman Lamb MP writes… Liberal reform in employment law

On the last day before Parliament’s summer recess, while many MPs were packing their bags for home, I was handling the last of seventeen committee sessions for the Enterprise and Regulatory Reform (ERR) Bill.

Along with important measures establishing the Green Investment Bank and creating a powerful new competition authority, the Bill contains a whole range of provisions designed to improve regulation, increase business confidence and boost growth. Among them are changes to the way disputes in the workplace are handled.

I have something of an insight into how the law in this area works in practice. For my sins, I was an employment lawyer prior to becoming an MP. Acting for both employers and employees, I saw firsthand some of the problems with the tribunal process. The Employment Tribunal had originally been established as a layman’s court. The clear intention had been that employee and employer could go to the tribunal without expensive lawyers in tow. How that has changed. Slow, costly and adversarial, it can exacerbate problems and discourage either side from reaching an early agreement. On average there is a stress-filled 5 month wait for a hearing. All this is great for lawyers – but not so good for either the dismissed employee or the ex boss.

There are two key measures in the ERR Bill which can make a real difference. First, before a claim can be issued in the tribunal, an applicant will have to contact ACAS. This is to give an opportunity for early conciliation. We know from the current voluntary scheme – applicants can choose to go to ACAS if they wish – that a significant proportion of those cases do not end up in the tribunal. No-one will be forced into conciliation – but an ACAS officer will have the chance to talk to the complainant to offer it.

The second measure provides a real alternative to the current adversarial battle over the rights and wrongs of a dismissal. We are making it easier for employer and employee to reach agreement over ending the employment relationship.

I believe in the fundamental importance of decent rights and protections in the workplace. That is why I expressed my concern about proposals put forward by Adrian Beecroft for so-called  ‘no fault dismissal’ which would take away those rights. Such a move could signal the return of a hire and fire culture.

It is worth reiterating the fact that the way to get the best out of a workforce is to recruit staff effectively, to invest in their development and give them responsibility and, ideally, a stake in their enterprise.

Yet, sometimes things don’t work out. Sometimes it may actually be in the interests of both sides to end the relationship. But so often it all ends in bitterness, acrimony and recrimination.

Is there a way of avoiding this? On the one hand, it is important that employers have the confidence to deal with genuine problems rather than putting off the evil moment for fear of the consequences of things going wrong. On the other hand, employees should be treated fairly.

I know from my own experience, acting as a lawyer, that serious workplace problems can often be resolved quickly by offering a settlement as an alternative to a protracted battle. I wanted to find a way of enabling employers to use this approach without having to spend a fortune on lawyers. The Bill delivers this. The employer – and indeed the employee – will be able to propose a settlement without this being used in evidence against them in unfair dismissal cases brought to tribunal should agreement not be reached. We will follow up this legislation with guidance for employers including model letters and standard settlement agreements.

Crucially, this approach leaves the necessary protections for employees in place. The employee is under no obligation whatsoever to accept the agreement (indeed, for it to even be valid he or she must have received independent legal advice). They have the right to reject it and proceed to a tribunal if they wish. Yet the option of a settlement with a payment of compensation and possibly a reference often seems a very attractive alternative to a long, uncertain wait for your day in court,

The employer secures peace of mind knowing that they will not face expensive tribunal proceedings. This is a decent, sensible, Liberal reform that provides a way of dealing with problems when they occur and allows both parties to avoid the expense, stress and uncertainty of lengthy tribunal proceedings.

* Norman Lamb is MP for North Norfolk and was Liberal Democrat Minister of State at the Department of Health until May 2015. He now chairs the Science and Technology Select Committee

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  • @ William Hobhouse – How would a minimum wage employee, unfairly dismissed, barely able to afford even travel to the employment tribunal (someone in Yeovil would have their ET in Exeter, that’s over 20% of a week’s Jobseekers Allowance for one return rail fare), facing a legal team on his own cope with a serious financial risk. That person, even if they were completely in the right would be foolish to risk bankruptcy if the expensive lawyers persuaded the judges that the dismissal was fair. Is this Liberal Justice?

    P.S. Before anyone says Legal Aid, unless you’re lucky enough to live in Scotland, there is no legal aid payable for ET claims.

  • The “no fault dismissal” measure is a reactionary measure which has the potential to seriously back-fire politically speaking on any politician associated with it once it comes into force and a few “horror stories” surface as they inevitably will. An idea that should be shelved by anyone even remotely interested in the next election.

  • Why no comment on increasing the unfair dismissal qualifying period from one to two years and charging workers up to £1,200 to bring a complaint to an Employment Tribunal? Maybe because these reforms are “liberal” only in that give employers the freedom to ride roughshod over their employees.

  • How many know the ‘Reality’ of the current workplace situation for those at the bottom and desperate for work.

    Many large companies use ‘agencies’ as the only means of such recruitment….(I’ll use the case of a luxury car company of which I have specific knowledge) Employees were told that for month one they were employed by the agency, month two as temporary company staff and from month three ‘permanent’ staff. (Salary for shift workers? a ‘massive’ £7.80 pH)

    After 9 days the whole shift was ‘sacked’. The reason? A rival agency supplied workers at £7.25 pH.

    These sort of actions are reminiscent of pre-union days when workers were considered as ‘tools’ to be used, or discarded, at a whim. Sadly, the coalition seems determined to take us back.

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