Labour’s proposals to introduce ‘day one’ employment rights could lead to employment tribunals being overwhelmed, an employment law firm has claimed.
According to GQ Littler, if the plans are introduced without employers able to rely on probation periods during which dismissals are less complex, a spike in legal disputes against employers may result.
It could also lead to a more agile workforce, willing to move between jobs under day one protection rights.
The proposed changes could move the UK to having more pro-employee rules in this area than almost any country in Europe. The UK currently has no formal limit on probation periods.
In France, employees only get “unfair dismissal”-style protections after two to four months with Germany, Greece and Italy on six months. In Belgium, no probation period is permitted.
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Under current rules, UK employees can only bring an unfair dismissal claim after being employed for a minimum of two years (other than in certain exceptional circumstances). This period could be reduced to day one of employment under Labour’s proposals as they stand.
However, Labour is consulting with business leaders over its plans which may yet see some movement. Commentators speculate that probationary periods for performance will still apply under Labour, even where workers are given day-one rights to sick pay and parental leave. It is unknown how long such periods will be; but it appears compromise is likely with, say, Ireland’s level of protection (6-12 months with unfair dismissal protection from 12 months’ continuous service) perhaps being where the UK ends up.
Ben Smith, senior associate at GQ Littler, said: “These proposed changes signal a significant shift in the employment law landscape – and, if implemented [as they currently stand], would be something of a shock to many employers.
“Dismissals before two years’ service tend to be more straightforward but under these proposals, employers will much more frequently have to implement a more formal process to dismiss. Employers will likely have to implement time and resource-intensive processes at a scale that is radically different to the current status quo.
“Many employers may not have the experience or capacity for this and would face a steep learning curve.”
Smith added that Labour’s current plan to remove the cap on compensation for unfair dismissal claims (currently 12 months’ pay or around £115,000, whichever is lower) would make the consequences for employers who make missteps more expensive, encourage more claims, and make it more difficult to resolve claims without the need to go to tribunal.
He envisaged that the proposal could also create “a more agile workforce, with employees more willing to move between jobs if length of service becomes less tied to employment protections.” This, he said, may prove to be “both a blessing and curse for employers, making it easier to attract talent but more difficult to retain it.”
Smith said that the proposals could add to the backlogs at tribunals and delays in employment cases that would be “very frustrating for employers and employees alike.”
However, some of the pressure on tribunals could be alleviated by the creation of a single enforcement body to enforce workers’ rights. The New Deal states: “The new body will be given extensive powers to inspect workplaces and bring prosecutions and civil proceedings on workers’ behalf relating to minimum wage violations, worker exploitation, and discriminatory practices.”
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As Labour consults with business leaders and unions over the final form of its New Deal, HR will need to keep abreast of any changes likely to be in the pipeline, said GQ Littler.
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