With the huge influx of employee legislation since Labour came to power, do
employers have a right to be anxious? Simeon Spencer, an employment lawyer at
Morrison and Foerster, reports
It would be natural to expect a LabourGovernment to have a far stronger
focus on employee rights than its more ‘business-friendly’ predecessor. At
first glance, it may appear that employers are suffering at the hands of an
interfering government, introducing additional layers of regulation that can
only stifle commercial activity. But what is the reality? Are employers’
anxieties well founded?
In the past seven years, perhaps more so than at any time, HR professionals
and employment lawyers have had to become familiar with laws and regulations
emanating from Europe.
In the 1980s, the impact of European legislation was largely restricted to
aspects of consultation with the workforce and straightforward discrimination
issues.
The 1990s brought a sea change in two ways. First, reliance upon developing
case law from the European Court of Justice increased, with highly-significant
cases in the areas of sex equality and transfers of undertakings. Second, more
‘social-based’ legislation leaning towards greater employment rights flowed
over to the UK.
Since 1997, the Labour administration has not only been legally bound to
implement Social Chapter legislation, but has also had the ideological
commitment to do so. All HR professionals will be acutely aware of the irony
that the founding ethos of the employment tribunal system was quick, easy and
simple justice for the working population that did not require lawyers.
However, these tribunals, more so than any other court, now deal with some of
the most complex interactions between EU law and its implementation in the UK.
The jurisdiction of employment tribunals is ever increasing, and the
potential for damages awards or compensation can now be unlimited, with awards
regularly stretching to hundreds of thousands of pounds. In any other
circumstances, only a High Court judge would hand out such awards. The
increased work rate of the employment tribunals, as much as any other
indicator, demonstrates the impact of recent employment legislation.
There have been 17 employment-related Acts of Parliament since 1997, and
behind each of them is a ballooning array of secondary legislation in the form
of regulations, not to mention the ‘soft’ laws of codes of practice. The full
scope and implications of all this legislation warrants several books, but
there are a number of distinct trends in EU-based and domestic law which merit
examination:
Atypical workers
Casuals, temps, consultants, homeworkers and fixed-termers have not
traditionally enjoyed the same rights of protection as the typical ’employee’
under UK employment legislation. Pressure from Europe to regard all such
atypical categories as ‘workers’ and the extension of rights to workers as a
broader category than the restrictive ’employee’, has been taken up by the UK
Government in several key areas.
If there is a trend at all, it must now be towards attaching rights,
wherever possible, to this broader category of ‘workers’.
Many rights are now attached to workers that would previously have been
restricted to employees, including forms of unfair dismissal, such as on
grounds of public interest disclosure. Other legislation, most emanating from
Europe, also bolsters this trend – for example, in the areas of working time,
part-time workers, discrimination rights and, (controversially, although not
yet passed,) temporary workers.
Worker participation
Unlike countries such as France and Germany, the UK does not have a
developed culture of worker participation at the decision-making or strategic
level. However, the seeds of a real trend towards greater worker participation
– sown by the transfers of undertakings and redundancy collective consultation
rights back in the 1970s – have grown through European works councils, and are
likely to blossom in the UK through the implementation of the Information and
Consultation Directive. This is going to give worker consultation forums a
strategic role to play in aspects of corporate governance and related decision
making.
The present administration has also heralded the introduction of the first
truly workable system of enforced trade union recognition. This is still in its
relative infancy, but trade unions, as expected, have been prompt in taking
advantage of this system. More specifically, they have been quick off the mark
obtaining recognition rights for collective bargaining in many areas where
employers previously would not have considered voluntarily entering into
collective agreements with trade unions.
Work-life balance
Parental leave, time off to deal with domestic emergencies and positive employee
developments in maternity pay issues come to us from Europe.
However, the present administration has credentials of its own in this area,
and has displayed them to significant effect over the past six years. The right
to request flexible working arrangements and adoption leave, as well as overall
improvements and the rationalisation of maternity leave and pay, was born on
domestic shores. As yet, there is still no ‘right’ to flexible working, but as
a trendsetter, the design is clear.
Discrimination
This is now big news both with our European neighbours and here in the UK.
The political and cultural blue water between different EU jurisdictions
historically resulted in only sex discrimination being legislated for at the EU
level. Evidently, we have sailed closer together in social, political and
cultural terms, and the trend is now for the EU to legislate for discrimination
in its many guises.
Directives outlawing discrimination in the workplace on the grounds of race,
disability, religion, age and sexual orientation have been passed in Europe and
are in the implementation pipeline for all EU countries. Add to this the
reversal of the burden of proof in discrimination claims, so that employers now
have to prove the negative. Employers are surely bound to face increasing
numbers of claims that are harder and more costly to defend.
Employers who are feeling increasingly weighed down by the sheer quantity
and complexity of legislation coming through the system can take some comfort
from the fact that the Department of Trade and Industry is to set commencement
dates for new domestic employment legislation at set times, twice a year – 6
April (the first day of the new tax year) and 1 October. This should assist
employers in at least knowing when to look for new measures.
Somewhat surprisingly, the latest report from the employment tribunal system
indicates that the overall number of claims received fell last year.
However, this positive news has to be balanced out by the fact the claims
being received tend to be more complex, and incorporate more than one course of
action, thus creating lengthier hearings.
It would appear that the tide from Europe and on the domestic front has been
flowing firmly in the direction of the workforce. However, a more careful
analysis shows the picture is not so simple.
It is undeniable that 17 pieces of legislation and the accompanying
secondary legislation have created a bewildering array of new and improved
rights.
However, the position could have been far worse (from the employers’
perspective) if all the possible expansive developments had been embraced by
the Government along with the full potential of EU pressure.
The statutory union recognition system is something of a shadow of what was
originally intended. The flexible working request right is precisely that; a
right to ‘request’. A right to ask is hardly as powerful as a right to demand,
and the ease with which employers can reject requests may make it somewhat
toothless in practice.
The measures soon to be introduced to limit access to employment tribunals
where internal procedures have not been exhausted also amount to some
recognition by the Government that the mushrooming of tribunal claims is in
danger of getting out of hand if not curbed in some way. But ultimately,
curbing access to tribunals will probably have the reverse effect by creating
more issues for controversy and for tribunals to adjudicate.
The result is that HR professionals and employment lawyers are unlikely to
go hungry for a long time yet.
Key legislation
1. Acts
– Employment Act 2002
– Employment Relations Act 1999
– Human Rights Act 1998
– National Minimum Wage Act 1998
– Data Protection Act 1998
– Public Interest Disclosure Act 1998
– Employment Rights (Dispute Resolution) 1998
– Protection from Harassment Act 1997.
2. EU directives
– Information and Consultation Directive 2002 (soon to be implemented in the
UK)
– Equal Treatment Framework Directive 2000 (soon to be implemented in the
UK)
– Race Directive 2000 (soon to be implemented in the UK).
3. Statutory instruments (in the main, implementing EU Law)
– Conduct of Employment Agencies and Employment Businesses Regulations 2002
(soon to come into force)
– Flexible Working Regulations 2002
– Statutory Paternity Pay and Adoption Pay 2002
– Paternity and Adoption Leave Regulations 2002
– Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations
2002
– Sex Discrimination (Indirect Discrimination and Burden of Proof)
Regulations 2001
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– Part-time Workers (Prevention of Less Favourable Treatment) Regulations
2000
– Working Time Regulations 1998.
