Employment Law Review and its potential impact on employee rights
Soon after the coalition government came into power, Prime Minister David Cameron made several statements on his intent to reduce the burden of bureaucracy, promising to do away with unnecessary red tape. A short time later, the 'Red Tape Challenge' was launched, a canvassing of public opinion aimed at addressing various aspects of the law that may be deemed overly bureaucratic.
Giving rise to the Employment Law Review, the Cabinet-backed service proposes various changes to laws affecting how people are recruited, fired, managed and so on. Ignoring the point that the Red Tape Challenge provides the perfect cover for legislating through the back door by proposing unfavourable changes in the name of popular opinion, the service could be regarded as an excellent opportunity to improve employment law in the UK.
The issue of employee rights has long proved contentious in the UK, where employment laws have evolved in part to balance the intrinsic inequity between employers and employees.
One of the main goals of the Employment Law Review is to consider changes to The Transfer of Undertakings (Protection of Employment) Regulations 2006, or 'TUPE', as it is usually known. TUPE is a complex body of legislation that some might argue is flawed in several areas. Intended to deal with transfers of business, such as in company acquisitions, TUPE serves to protect employee rights by requiring the new employer to take on the acquired company's employees following a takeover. Under TUPE, the subsumed employees would retain their existing terms and conditions of employment upon joining the new company.
In theory, TUPE addresses the fundamental inequity that was discussed above in the context of business transfers. Rather than be made redundant, employees for the acquired firm simply become part of the new venture. Unfortunately, this can mean a different location, environment and culture. Critics of TUPE have argued that employees are forced into new positions with new firms in fear of losing their jobs. Sometimes, it would seem, redundancy is the preferred option.
A more fundamental problem of TUPE is that the legislation was not drafted as clearly as it perhaps ought to have been. Although intended for business acquisitions, TUPE can apply in other situations. Most notably, a business that wins a contract from a rival firm could be subject to TUPE if the losing company suffers badly from the loss of contract. In some cases, the winning business would be required to take on the loser's employees in the event of their being made redundant as a result of the transaction. Compensation may also be necessary.
TUPE also precludes the transferee (the company being taken over by another firm) from entering negotiations with employee representatives. Only after the takeover has been completed is the transferee able to discuss redundancy, but by this stage, employees may already be compromised by the transfer. Employee representatives are also denied the opportunity to discuss alternatives to redundancy, such as redeployment. The result is often one of over-employment; too many employees exist for too few positions. There is little room for uncertainty when it comes to employee rights. However, any proposed changes to TUPE have yet to be confirmed.
Review of dismissal laws The Employment Law Review has also proposed changes for the way in which employees are dismissed. The previous administration was criticised for making it too difficult for employers to terminate the contracts of workers who were deemed not to be performing to a certain standard. Business Secretary, Vince Cable, therefore, has suggested helping companies by requiring that all claims of unfair dismissal be initially dealt with by the Advisory Conciliation and Arbitration Service (ACAS), which is a Government body. The measure would seek to restrict the number of claims leading to employment tribunals, thereby making it easier for firms to hire and fire staff.
The implications of feeding all claims through ACAS are likely to be considerable in the context of employee rights, but employers ought to welcome any move that makes it more difficult for workers to claim unfair dismissal. The measure was proposed as part of an overhaul of the UK's employment tribunal structure, which has been the subject of other fundamental changes to date, including the introduction of tribunal claim fees (to be paid by the dismissed worker). The government also hopes to see greater use of mediation services prior to claims being made by aggrieved employees. Despite Vince Cable's reassurances to the contrary, these changes have been designed purely for the benefit of employers.
To date, the Employment Law Review has introduced far less than it has proposed, but the consultation's achievements are not without consequence. So far, the review has successfully managed to remove the default age of retirement, which ought to benefit older employees who would rather continue working than be nudged a step closer to oblivion by their employers.
The Employment Law Review has proposed the abolition of the Agricultural Minimum Wage (and Agricultural Wages Board), launched a comprehensive review of health and safety legislation, commissioned an independent review of the system that manages absence from work caused by sickness and consulted on various other reforms. Highlighting the focus of the review, the government has also introduced an Employer's Charter that provides guidance for employers. There has been no suggestion of a similar charter being introduced for employees.
Photo by Olivier Bruchez





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