The future of employment law: is a flexible approach really the answer?

In July 2011, the CBI released a report calling on the Government to adopt a flexible approach to employment law instead of “automatically opting for legislation”. However, Adrian Crawford, employment partner at law firm Kingsley Napley, argues that better relations between employers and employees cannot be guaranteed by a move away from legislation.

In spite of its title, the CBI’s latest report, “Thinking positive: the 21st century employment relationship”, has failed to inspire me with an Obama-like feeling of “yes we can”. While it accepts that there are areas in which the law is an essential tool to protect employees, it argues that the Government should regulate the relationship between employer and employees, wherever possible, by way of guidance and non-binding codes of practice.

Clare Morley

Adrian Crawford, employment partner at Kingsley Napley.

During the last recession, the report argues, a new spirit of cooperation emerged between employers and employees, which allowed jobs to be retained and reduced the need for new legal protections for employees. The CBI adds that employers and employees should be given more freedom to agree workplace conditions between themselves. In support of this argument, the success of the “right to request” model in respect of flexible working is cited.

I’m afraid that my reaction, after more than 20 years as an employment lawyer supporting both businesses and individual employees, is “yes, nice idea, but…”

A new engagement?

Have employers really developed a new engagement with their employees during this recession? Compromises have been made and, as a result, fewer jobs than expected have been lost, but this does not mean that the nature of the relationship has changed forever.

Some employers may have recognised that redundancies are a blunt instrument. They cost a lot, it takes time to achieve cost savings from them and, quite often, circumstances change and the employer starts recruiting again before the redundancy exercise has brought overall savings. In highly skilled businesses, the loss of critical skills through redundancies may also prevent the business from taking advantage of any upturn.

On the employees’ side, agreeing to new conditions can be attractive should the alternative be no job at all during a time of high unemployment. The compromise of agreeing a reduction in hours or pay, or introducing greater flexibility, benefits both sides in this situation. But, can we safely say that a similar consensus will be reached in other situations where the interests of employers and employees do not coincide in the same way? I’m not convinced.

Flexible working: a special case?

I also have reservations about flexible working providing the CBI with evidence for increased engagement between employers and employees. Does this really show us that dialogue without legally binding obligations can work on a much wider basis?

In part, the increased engagement is down to a cultural shift towards a desire for a better balance between work and family life. This includes not only mothers returning to the workplace but also fathers wanting to participate more in family life. There are also many employees without children (and therefore denied the statutory right to request flexible working) who want time for their life outside of work.

Many employers increasingly recognise that flexible working policies can make for a happy and productive workforce; others are mainly concerned about the risk of a claim – eg for indirect sex discrimination should they refuse a request without good reason.

Limits of codes of practice and guidance

I am also pessimistic about codes of practice and guidance being the way forward. In my experience, many employers have no interest in them unless the breach carries some kind of sanction. The Acas statutory code of practice on grievance and disciplinary procedures has been a great success and is widely followed, but failure to comply is taken into account when deciding if a dismissal is unfair and can lead to an increase in the compensation payable.

There are many employees who have valuable skills and knowledge of their rights, which enables them to negotiate effectively with their employers. There are also many employees who do not have this equality of bargaining power with their employers and whose employers seek to take advantage. They still need the protection of enforceable legal rights.

However, I would add that, although changes to employment legislation are now made “only” twice a year, this is still too much. Employers need a stable legal framework. Introducing fewer changes, only after proper consideration, would itself be a big step forward.

Adrian Crawford is an employment partner at Kingsley Napley LLP. The views expressed are his own.

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