March 16, 2012

The Government's Red Tape Challenge and the Results

Written by Stuart Atherton

In 2011 the government undertook a pledge to businesses to cut red tape and simplify the law in relation to employment and human resources. Consultation with interested parties was issued generally through websites with the employment law areas concentrating on four main topics: compliance and enforcements, letting people go, managing staff, and taking people on. Contributions came from wide range of parties including the Employment Lawyers Association, Federation of Small Businesses and the Confederation of British Industry. As a response new legislation was proposed and will now be introduced from the 6th April 2012.
Stuart Atherton of Peter Lynn and Partners answers some key questions and explains how this new legislation affects employers and employees:
What is the difference between a worker and an employee and how does it affect their employment rights?
“The first thing to remember is there is a clear difference between a “worker” and an “employee”. In employment a volunteer worker without a contract would be entitled to certain claimant rights such as holidays and national minimum wage, but they could never claim for unfair dismissal or redundancy, because their circumstances would not be recognised by any employment tribunal. However, an employee with a contract of employment would be able to claim more extensive employment protection rights under the current law including unfair dismissal, as long as they could prove that they had been in continuous employment for 12 months in the case of unfair dismissal.”
Is the law regarding continuous employment for Unfair Dismissal going to change?
“Yes, from the 6th April 2012 the law will change from 12 months to 24 months. It now means that the employee will have to prove that they have been in continuous employment for 24 months before any claim for unfair dismissal can be made to any tribunal.
In theory this now makes it more appealing for employers to recruit staff, as there is an extra 12 months cushion in place to allow employees to gel into the work place and do the job effectively. From an employer’s perspective they do not face the risk of being challenged for unfair dismissal if the employee’s contract is terminated before a 24 month period of continuous employment.”
Is there a fee or a court cost to an employee who presents a complaint to the employment tribunal?
“Under the current law there is no fee for the claimant, but this will be changing. Whilst a date has yet to be fixed, it is widely expected that fees of between £200-£1750 for issuing claims will be introduced possibly from April 2013. I see this as good for business simply because it filters out those non-genuine claims where maybe malice as opposed to justice is the motive. In any instance the employer has to defend a claim or risk a default of judgment, hence incurring costs. The new law at least puts some responsibility on the claimant to think before they act as the initial claimant’s fee could exceed £1,000.00”.
Why are there so many changes to Employment Law and are there any recent examples of good legislation?
“The Law is always changing, but there is always a reason for any change. This current legislation is designed to simply cut through the red tape and make it more attractive for employers to take on staff, hence creating employment opportunities whilst providing fair employment rights to employees in return.
A recent example of good legislation is the Equality Act introduced in October 2010 and now working extremely well, making the law clearer to both employers and employees. This effectively is a Consolidating Act which combines issues on Race, Disability and Sex (as well as other areas) into a piece of legislation which is simpler to understand and easier to manage.
Despite the explanations how is a typical SME without a dedicated HR function supposed to keep on top of the changes in the law and manage their business?
It’s a good question and without the right support it’s very difficult for an employer to keep on top of all of the legal requirements. Running a business on a day to day basis is hard enough for any business owner, without the added worry of complex legal issues and potential legal challenges thrown up by employees.
As a firm of legal specialists we recognise this problem, hence the introduction of the bespoke “Guardian Scheme” specifically tailored for SME’s employing below 250 people. The Guardian scheme is quite unique and is designed to make the business stronger and save the business owner money.
It provides an array of business solutions to complex subjects such as recruitment, employment contracts, HR training and claims. Peter Lynn & Partners is one of the few accredited ‘Lawyers for Your Business’ solicitors operating in South West Wales and The Guardian Scheme in particular is underwritten by Insurance to offset the risk of potential claims. At its highest level it offers full protection from any Employment Claim.
HR training is a key component part of the scheme and is delivered by our staff. Employee risk assessments are put in place and this re-assures potential lenders that the risks associated with any potential claims are kept to a minimum. The other consideration is the pace with which employment law changes; hence the scheme is designed to cover up to date case law and legal developments. Sensible business planning embracing this scheme is in our opinion a must for all SME’s.
Our expertise goes beyond the traditional legal boundaries and so we offer a complete troubleshooting service to turn around ailing businesses. We recover assets and reschedule debts as well as offering mediation and dispute resolution.
All this is delivered in a personal approach backed by a vast experience of helping firms along the M4 corridor.”
For more information on Peter Lynn & Partners or any of the points covered in this article contact Stuart Atherton ([email protected])