What is the Government doing to reduce the burden of Employment Law
12th January 2011
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I blogged recently ( http://www.elliswhittam.com/blog/ ) about the huge amount of legislation and case law that makes up employment law.  I said I would come back to what can be done about it.  The coalition government has plans of its own to reduce the burden of employment law and, of course, like anyone working to build a successful business, I applaud them for trying.  But, call me a (not so) old cynic, I do wonder how much progress we will actually see. 

Most recently, the Government has announced it is going to stop the ‘gold-plating’ of EU law. Instead, any new EU legislation will normally be directly copied into UK law, so that British businesses do not face additional hurdles relative to their European competitors.  A laudable aim, but there are a couple of fairly obvious downsides to this approach.  First, it passes the risk of understanding EU law to employers; second, it can lead to more litigation to decipher the EU law.

As an example, you could say that the UK gold-plated EU law when it required employers making more than 20 employees redundant to start consulting at least 30 days (or where 100 or more redundancies were proposed, 90 days) before the first dismissal.  The EU directive says nothing about these 30- and 90-day periods; they are UK gold-plating.  The Directive says only that the employer must begin consultations ‘in good time’.  But what does ‘in good time’ mean?  Well, the answer is going to vary from case to case and only an employment tribunal could definitively tell you whether you’ve got it right.  If the government had left  ‘in good time’ undefined, that  would only have resulted in the risk of non-compliance falling on employers and an increase in litigation designed to establish what ‘in good time’ means in particular circumstances.  So, I think the jury is out on this one; it could actually benefit lawyers more than employers!

There is another proposal doing the rounds in Government at the moment and that is to increase the qualifying period for unfair dismissal from one to two years.  Unlike the gold-plating decision, this is still at the proposal stage.  This does, though, seem to offer an unqualified benefit to employers.  Estimates are that it could lead to a fall of around 10,000 employment tribunal claims a year.  Sadly, we can’t get too excited about that, given that there were about 236,000 claims last year - but every little helps!  Unfortunately for people focussed on growing businesses, even this tiny cloud for employment lawyers will have a silver lining for them as there is bound to be an increase in cases where inventive claimant lawyers allege discrimination or whistleblowing is the reason for a dismissal, where no qualifying service is needed. 

Finally, the government has also committed to a policy of ‘one in, one out’ for all new business regulation.  For every new regulatory burden they impose on business, they have committed to remove an equivalent existing burden.  Of course, they are politicians, so this apparently excellent initiative is not all it seems.

First, it does not apply to new EU law.  So when the Government brings in the Agency Workers Regulations later this year, there will be no regulatory burdens removed to compensate for the estimated cost to business of over £1.5bn every year that these regulations will impose.

Second, they haven’t committed to remove one employment law for every new one they introduce; the legislation removed could be from a quite different area.

Lastly, what must go out for every new regulation that comes in is a regulation that imposes equivalent net costs on business.  That sounds fine but it all depends on the figures you use.  For example, in the view of the Government, the 2010 Equality Act, far from imposing burdens on business, is estimated to produce net benefits over a 10-year period of between £39 and £674 million.  So, under the ‘one in, one out’ policy there would be no need to remove any existing law to bring in the 218 sections and 28 Schedules of the 2010 Act! 

So, marks for trying but the Government will only start to pass the business test when it just stops adding to the mountain of employment law.

About the Author

Paul D

Member since: 10th July 2012

Chester word of mouth specialist, promotes and markets the best businesses in Chester. Passionately supporting local businesses, organisations and events.

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