Unfair Dismissal payouts to be reduced under new proposals

[MARTIN3030]

Business Secretary Vince Cable has proposed a cut in how much workers can claim for unfair dismissal at employment tribunals.

He will consult on plans to cut the limit on compensation payouts to a maximum of 12 months' salary.

He also wants to bring in settlement agreements, in which staff agree to leave without being able to go to a tribunal, but get a pay-off in return.

 

 

 

 

 

http://www.bbc.co.uk/news/business-19594879

[renegadeimp]

Typical tory. Knocking down the hardworking citizen and giving yet more power and rights to big business.

[markl1987]

Heard on the news this evening that this isn't going ahead and plans are to be scrapped

[altobelli]

Disgraceful if this goes ahead - compensation for unfair dismissal should reflect loss as far as it is possible to measure. In many cases this may be less than 12 months salary, but if the likely loss is more than 12 months salary then the award should reflect the loss. If a doctor or soemone in the financial industry is unfairly dismissed they may not work again in their chosen field or may have to start at a more junior level, in these cases the career loss could easily exceed 12 months salary. Also, will the award be capped at the lower of the current cap and 12 months salary?

 

There is not a chance in hell that measures such as this will encourage staff to take on more workers, all it will do is allow staff to get rid of existing workers more easily. The reasons for unfair dismissal can be varied, the person dismissed could be a victim of bullying, harassment, may have a bad working relationship with a manager due to the manager's poor people management skills, or may be better than the manager at the job and the manager may be jealous of them. In a lot of large corporations, managers are where they are because they've been with the company a long time, many of them gained experience in a much less competitive job market and many of them have no business acumen whatsoever. The idea that the average British manager is some well-qualified business expert who makes hiring and firing decisions based on solely economic reasons and that their actions drive the economy is laughable.

 

If we want to compete with other economies succefully, we won't do this by making workers fearful for their jobs and allowing bullying management to flourish, we'll do it by training people in their jobs, making sure that management is comepetent and loyal to staff, and making it easier to remove bad managers - these people are highly paid and it is their bad decisions that more often than not are at the root of poorly performing companies. Not all managers are bad, but we really shouldn't be making laws which support those who are.

[becky2585]

The other worrying point is the rebranding of compromise agreements! It will inevitably lead to a rise in unscrupulous employers making employees compromise their legal rights for money which just isn't sufficient, and making them sign a document which, without the benefit of legal advice, they just won't understand!

 

That, plus I may be out of a job in 12 months

[altobelli]

Oh Becky, that would be the biggest tragedy of all!

 

Seriously though, you're right, and these are employment rights that have been earned over a long period of time which are being stripped away. What will probably end up happening is that the floodgates will open to increased volumes of discrimination and stress claims.

 

Also, some of the recent changes are discriminatory in their nature - the recent decision to impose a 2 year time limit before unfair dismissal can be claimed negatively effects women and minorities, who are statisically more likley to have less tenure in the job.

 

Interestingly, at one time the qualifying period for unfair dismissal was only 6 months!

[becky2585]

It will cost at least £1,200 to bring a claim for discrimination, which may price people out of bringing claims altogether.

 

And £390 to bring an unlawful deductions claim - a lot of those claims aren't even worth that. Its basically just an excuse to price out lower value claims. I think it's disgraceful.

[Sidewinder]

It will cost at least £1,200 to bring a claim for discrimination, which may price people out of bringing claims altogether.

 

And £390 to bring an unlawful deductions claim - a lot of those claims aren't even worth that. Its basically just an excuse to price out lower value claims. I think it's disgraceful.

 

I agree - I have always said that the changes - which needn't price employment enterprise out of the market - should be to make a basic employment law understanding a prerequisite for those setting up in business. Same as they have to for basic food hygiene. I've never understood why employers think that existing law is a barrier to employment personally. Robust recruitment policy and procedure, adequate training and performance reviews particularly in the first few months and provide decent working conditions and clear goals.

 

It's not difficult to avoid Tribunal claims and information on getting it right from the start is easier now than ever with internet resources.

[Sidewinder]

Surely these changes will just lead to more cases through the County Court system rather than Tribunals though?

[Pusillanimous]

The thing about capping it to one year's salary makes it a rich man's charter.

[becky2585]

Surely these changes will just lead to more cases through the County Court system rather than Tribunals though?

 

Possibly, although the county courts don't have jurisdiction to hear many employment claims, including unfair dismissal.

 

Breach of contract, unlawful deductions and certain discrimination claims are possible - but there are feed associated with the county court too, which many may not want to pay up front!

 

I think there may be an increase to costs awards - and I would hope that the tribunal issue fees would be paid by the employer if they lost - but who knows!

[renegadeimp]

Heard on the news this evening that this isn't going ahead and plans are to be scrapped

 

Maybe so, but this is the 2nd or 3rd time that the Coalition have discussed it and only dropped it due to public pressure.

[becky2585]

Maybe so, but this is the 2nd or 3rd time that the Coalition have discussed it and only dropped it due to public pressure.

 

It's merely been in consultation stage, so nothing's been dropped - just amended. It's frustrating, particularly as we don't know when it's due to come into force!

 

They didn't drop the 24 month qualifying period for UD, that was the first proposal to be implemented.

[altobelli]

I think I read somewhere that if the claimant wins they get their fees refunded and the employer has to pay a fine.

 

I wonder if we'll see the boundaries of wrongful dismissal pushed - this is usually limited to wages in lieu of notice, but there was a case earlier this year at the Supreme Court where an NHS employee had bypassed the ETs due to the cap on damages. He lost his case, but one of the reasons given is that there are statutory, rather than common law remedies, open to unfair dismissal claimants. If this statutory remedy is removed/relaxed then there is a potential to challenge the findings of this case. One of the judges also recommended increased use of injunctions. True, the claimant in this case was a doctor and had a right to a very specific grievance procedure, including use of a lawyer, which wasn't followed, but it would be interesting to see a claim being put forward for actual loss incurred resulting from a breach of contract.

 

I read that around 1/3rd of unemployed have been jobless for more than one year (I would guess more for those dismissed from their last role) so the proposed one year cap could negatively impact a lot of people.

[renegadeimp]

Well, the conservatives have ALWAYS been on the side of big business. Mainly because their main donators are CEO's of major companies.

[becky2585]

Well, the conservatives have ALWAYS been on the side of big business. Mainly because their main donators are CEO's of major companies.

 

Yep.

 

To me, the new proposals scream "let's not address the fundamental issues causing claims - lets merely prohibit people from bringing them!"

[honeybee13]

Yep.

 

To me, the new proposals scream "let's not address the fundamental issues causing claims - lets merely prohibit people from bringing them!"

 

Classic politician behaviour in my view, let's treat the symptoms and not the cause.

 

HB

[altobelli]

True, but I'm not sure these proposals will even help businesses that much. There are mechanisms in place to get rid of unerperforming workers, the proposed measures are only likely to encourage bullying which won't help anyone. There may be some faults with the tribunal system, but in general its fair - if anything, employees should have more rights in order to bring the UK into line with other OECD countries. The ET system costs around £80mio each year, which in terms of UK GDP isn't that much, and its questionable whether these proposals will really save any money. The number of tribunal claims aren't rising if you strip out multiple claims, they have remained fairly stable.

 

The only companies I can really see benefitting from these proposals are venture capitalists, who have an interest in being able to make large numbers of layoffs with no fuss. The author of the Beecroft Report is a venture capitalist, so I feel he may have a conflict of interest in what he is proposing.

 

The responses to the consultations on the existing changes were met with much criticism, lawyers and the judiciary were opposed, as well as trade unions, and even HR via the CIPD only gave qualified approval. Of course business organisations, if asked 'would you like it be easier to get rid of staff?' will agree if the question is framed in that sort of way, but most employers, if asked to name the main challenges to their businesses, would be very unlikely to mention potential unfair dismissal claims.

[renegadeimp]

It's probably the start of some scheme to give businesses more power. Remember, this is the same group of politicians that wanted to remove the minimum wage and NHS in order for private companies to make huge profits. Theyve already started destroying the NHS, it's only logical to assume that they are working on removing employee's rights.

[altobelli]

There probably is some conservative idealogical reason behind it, but the problem is that what's being proposed will in my view ultimately weaken businesses. Also, people will just go from claiming unfair dismissal to claiming discrimination - uncapped, easier to win and not a thing the government can do about it to move the goalposts because its EU law.

[renegadeimp]

I wouldnt say its easier to win, as you have to prove beyond a doubt that you were discriminated against, and more importantly, that the discrimination was the cause of the employees dismissal.

[altobelli]

You have to make a prima facie case that disrimination took place, if this is done the employer has to prove that what they did wasn't actually discriminatory. The employee need not be dismissed directly because of discrimination, it could be an act of indirect discrimination which leads to dismissal, much more difficult for an employer to prove a dismissal was in no way discriminatory as a wide variety of acts can be interpreted as discrimination if a claimant so chooses.

 

Compare this to unfair dismissal, where a band of reasonable actions is allowed.

[Marieleeza]

The other worrying point is the rebranding of compromise agreements! It will inevitably lead to a rise in unscrupulous employers making employees compromise their legal rights for money which just isn't sufficient, and making them sign a document which, without the benefit of legal advice, they just won't understand!

 

That, plus I may be out of a job in 12 months

 

If these changes are endorsed, are they likely to become law next year?

 

Also other proposed changes seem aimed at bringing about the end of TUPE as we know it (since 2006) because workers will be offered another contract if business is sold or privatised but they will no longer be guaranteed exactly the same condition (salary, holiday and other benefits, I assume) Is that likely to be introduced next year as well?