Unfairly dismissed? Get your credit card out – justice now costs you £1,200

For weeks we’ve been confronted by a wall of noise from the government, and endless reams of column inches, on Labour’s relations with the trade union movement.   As storm clouds gathered over Falkirk the government sharpened their knives and proceeded to cut away at employment legislation happy in the knowledge that the lobby were too busy speculating on our internal relations to worry about the very people trade unions exist to protect – workers.

Until today, when it is already too late, the attention given to, and the number of articles written about, the attack on worker rights has been utterly woeful.

George Osborne might have joined a night shift at a bakery last week in a vain attempt at love-bomb #hardworkingpeople ahead of the GDP figures. But back in Whitehall the Chancellor – ably propped up by Vince Cable – carried on cutting regardless, knowing full well that the rights of those hard working people are being sufficiently diminished so as to ensure that legislation can no longer be seen as an effective route to recourse against the actions of unscrupulous employers.

Because, in the eyes of the government, employment rights haven’t been diminished enough already.  They don’t believe that increasing the qualification period for unfair dismissal claims – which since 6 April 2012 has allowed employers to sack or make redundant people with less than 2 years’ service, without reason or recourse – goes far enough in giving employers the ‘flexibility’ they need to grow.  Neither apparently does the change to the indexing of pensions to CPI rather than RPI, the scrapping of section 78 of the Equality Act 2010, the scrapping of legal aid for all employment matters, the cutting of the Union Modernisation Fund, the cuts to the Union Learning Fund or the cuts to the TUCs International Programmes.

Today marks the latest chapter in the race to the bottom for employment rights.  As of today:

• Claimants are now required to pay a fee to lodge an employment tribunal claim and a further fee to proceed to a hearing. These fees will be up to £250 to lodge the claim and up to an additional £950 for the hearing, depending on the type of claim. Fees are also being introduced at the Employment Appeal Tribunal.  Respondents will in some circumstances have to pay additional fees, for example for applications to reconsider default judgments or final hearing judgments.  Whilst a remissions scheme is to be available for those struggling with the cost it is both extraordinarily complex in make-up and limiting in scope.  Some of the deficiencies are already being highlighted by lawyers here.  Employees looking for more information on this would be wise to watch this short summary of the changes and how they will affect the submission of claims.
• The compensatory award for unfair dismissal claims will be capped at the lower of £74,200 or one year’s gross pay (not including pension contributions, benefits-in-kind or discretionary bonuses).  You have to wonder how any employee on an annual salary, of say £15,000, with no children and no state benefits (and therefore likely to be ineligible for remission) would be able to get justice from a system charging them up to £1,200 to wait up to a year to have their claim heard.
• ‘Pre-settlement discussions’ or ‘protected conversations’ become both legal and inadmissible in unfair dismissal cases unless there has been ‘improper behaviour’.  So, your employer can now, for example, tell you they think you’re failing in your role, tell you how onerous it will be to take you through the performance management procedure, how painful that will be for you, how, ultimately, it will likely to lead to your dismissal and invite you to resign instead.  As long they refer to that conversation as a ‘pre-settlement discussion’ you won’t be able to refer in any unfair dismissal claim to the pressure you were put under or the intimidation you faced.  Whilst ‘improper behaviour’ is supposed to be prohibited it will in many cases be almost impossible for employees to prove that it has taken place.  These, in the business, are known as ‘car-park conversations’ because they usually happen out of earshot of other employees. They usually happen out of earshot of other employees for a reason…
• New Employment Tribunals Rules of Procedure are being introduced. The changes include the ability for claims to be ‘struck’ out at an initial sift stage; the introduction of a single ‘preliminary hearing’; and an obligation on the tribunal to ‘encourage’ the parties to use alternative dispute resolution (however introducing a £600 cost for judicial mediation is likely to impact the take up of this).

From today employment becomes more precarious.  From today, it is be easier and cheaper for employers to dismiss anyone, whatever the circumstances.  The culture of workplace fear which this instils, combined with increased workloads (as companies try to do more with fewer employees) and fewer avenues in which employees can get help, is already impacting on mental health and well-being in the workplace.  A Chartered Institute of Personnel and Development study has highlighted the impact on business of poor mental health in employees. The study found that: 37% of sufferers are more likely to get into conflict with colleagues, 57% find it harder to juggle multiple tasks, 80% find it difficult to concentrate, 62% take longer to do tasks, 50% are potentially less patient with customers/clients.  A recent  report estimates that disorders of the brain – including dementia, stroke and mental health issues – cost the UK almost £113 billion per year, more than the GDP of New Zealand, a large proportion of which is the indirect costs associated with the loss of production due to work absence or early retirement.

Today’s changes in employment law make membership of a trade union even more valuable.  But Trade Unions will have to adapt their service models if they are to remain relevant to the changing needs of members.  These changes will see members asking for more support in pursuing legal claims – some unions like Prospect have already stated they will meet the cost of submitting legal claims on behalf of members who have reasonable prospects of success.  But not all unions have confirmed the arrangements that would apply for their members.

The government will of course stand idly by as unions struggle to meet the massive cost of such a commitment and of course they’d likely be quite happy for a market to be created within the movement itself if some provide the service and others don’t.  But as the law becomes an ever more ineffective route to resolution unions will have to place greater emphasis on non-legal avenues – redeployment, re-training, counselling and career advice will all necessarily move up the agenda in a world where there is no longer a ‘job for life’.