Limits on Tribunal awards for unfair dismissal

Submitted by carolyn on Fri, 14/09/2012 - 12:48

14 September 2012

By Roger Jeary

The announcement today (Friday 14th September) by Vince Cable Secretary of State for Business, that tribunal awards for unfair dismissal will be limited to 12 months net pay or national median earnings (£26,000) is the latest in the weakening of employment rights in the UK. Of course, as has been stated and written so many times before, no-one for one moment believes that this will create one single job or boost the economic recovery currently being undermined by the austerity programme of the Chancellor. So why do it?

Roger Jeary, IER blogger

14 September 2012

It is clearly part of the strategic policy of this coalition government to create a society where workers are simply regarded as human capital – to be traded and disposed of at will – by employers who are unable or unwilling to recognise workers as equals without whom any profits would be non-existent.

We know that worker protection in the UK falls far short of the rest of Western Europe and we are now witnessing the further diminution of what rights remain.

This is just one of a number of proposals from the government today to undermine worker’s rights. A lower cap doesn’t make it easier to dismiss staff. An employer must still act reasonably to justify dismissing someone with more than two years’ service. Instead, it makes it cheaper for employers to behave unreasonably. The proposals mean that bad employers can take a calculated risk that the maximum exposure is £26,000 – and take a commercial decision to act badly when they might not previously have done so.

Next on his list, and possibly the most insidious, are the proposals on fees. Straightforward claims for unpaid wages will cost £390 to take to a hearing. There is no way an employee on £300 a week, who has been underpaid £50, can afford to bring a claim. It makes justice unaffordable for workers on low incomes and gives unscrupulous employers comfort that their actions won’t be challenged.

Claims such as unfair dismissal and discrimination will cost £250 to launch, and a further £950 to get a hearing date – £1,200 in total. This prices many ex-employees out of the tribunal, and will encourage employers not to settle claims because they will gamble that the employee can’t/won’t pay the £1,200 fee.

Coupled with these attacks is the support for settlement agreements. I am unclear what is new about this since negotiated agreements have been common place in workplaces for as long as I can remember. The government is going to publish standard template ‘settlement agreements’ – which are already freely available for download.

The need for employees to get independent advice from a CAB, union or lawyer before settling claims may be abolished – it’s not yet clear. If that is the case there is a risk of employers pressuring employees to sign on the dotted line and withholding pay entitlements until they do. And further streamlining by judges of disposing of so-called weak cases will inevitably lead to workers losing the right to challenge bad decisions.

The only ray of light from today’s announcement is confirmation that Beecroft’s proposals for compensated no fault dismissal for micro-firms is being ditched. But given that Beecroft was pretty much isolated in thinking that this was a good idea this is no great surprise.

So a country that the OECD describes as having the lightest of touches on employment regulation now proposes to go that extra mile in returning us to a Victorian standard of employee relations.

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