Employment Rights Under Attack

The Coalition Government is using the problems in the economy as an excuse to attack employment rights. They claim that 'red tape' is holding back business and they see workers rights as 'red tape'!

Here is an overview of the changes to employment rights that are currently being introduced by the Coalition.

Reducing Redundancy Consultation Rights

The Government has recently announced that the redundancy consultation period is to be reduced from 90 to 45 days.

Currently, workers are entitled to a 90-day consultation if there are proposals for 100 or more redundancies. If there are to be more than 20 but fewer than 100 redundancies there must be a 30-day consultation.

Usdaw argued against the reduction to a 45-day consultation period. In the Union's experience the 90-day consultation period had been beneficial to employers, employees and the local community alike, in particular in cases of large-scale redundancies.

The new 45-day consultation period means that meaningful consultation as well as opportunities for redeployment will be limited.

Fixed term contracts which have reached the end of the fixed term period will be excluded from collective consultation obligations. Usdaw is concerned about the removal of consultation rights from fixed-term contract staff as this increases job and financial insecurity for vulnerable groups of workers.

There will also be a new non-statutory Code of Practice to address the issues involved in redundancy consultations. The Union had argued for statutory Acas Code of Practice. Although a new Code of Practice will be drawn up, it will be non-statutory. This means it is voluntary and merely relies on employers to do the right thing, with some employers likely to ignore it.

Unfair Dismissal – Qualifying Period Extended To Two Years

The qualifying period for protection from unfair dismissal increased from one to two years in April 2012. The increase affects those who started with their employer on or after this date. The one-year qualifying period still applies to those who started before this date.

The qualifying period for an employee to be entitled to a written statement from their employer setting out the reasons for dismissal also increased from one to two.

The increase to a two-year qualifying period means that millions of new workers are not only losing out on unfair dismissal protection but also have unfairly restricted access to justice if they are dismissed by their employer.

There is a real worry that the rise to two years will increase job insecurity and lead to a return to the hire-and-fire culture last seen under the previous Tory Government.

Employment Tribunal Fees – Workers To Pay Fees For Access To Justice

The Government has announced that employment tribunal fees that must be paid by workers in order to bring a claim to tribunal will be introduced in mid-2013. The minimum fee cost will be £390 and only people in receipt of certain benefits and some workers on low income will be exempt.

Usdaw has always opposed any restrictions on workers access to justice and supported a proposal at the 2012 Trade Union Congress calling on the TUC to step up their campaign against Government proposals to erode rights at work and to secure full commitment to this programme from the Labour Government.

Cutting Criminal Injury Compensation

On 27 November 2012 a revised Criminal Injuries Compensation Scheme came into force. This means that the vast majority of innocent victims of violent crime is no longer eligible for any compensation or will receive a drastically cut amount.

Usdaw has campaigned hard against the cuts on behalf of its many retail members injured every year in armed robberies and assaults at work, the majority no longer eligible for any financial support.

Employee Shareholder – A New Employment Status

The Government is looking to introduce a new employment status whereby employers can buy-out a number of key employment rights.

This proposal for a new 'employee-shareholder' status would allow employers to insist that new starters sign up to this new type of contract and waive important employment rights. Employers will also be able to offer this type of contract to current employees.

Under this new 'employee-shareholder' status, in exchange for at least £2,000 worth of shares in the business, employers would be able to buy out the following rights:

  • Unfair dismissal.
  • Statutory Redundancy Pay (including the right to claim from the Redundancy Payment Office).
  • Time to train.
  • Right to request to work flexibly - except parental leave returners.
  • Longer notice periods (8 to 16 weeks) to return early from maternity leave.

The first £50,000 worth of shares would be free of capital gains tax.

Usdaw supports the idea of workers having shares in their business. But the Union does not believe that workers should have to sign away basic employment rights to be stakeholders in their own business.

The Government has recently published the results of a consultation exercise into the new employment status. The proposal has received very little support, with only five out of 209 responses welcoming the proposals.

Despite this feedback, the Government is continuing to push this proposal through Parliament.

Future Changes?

In addition to the above changes, the Government is considering further changes including:

Settlement Agreements

The Coalition Government is proposing the introduction of so-called settlement agreements. It means that employees would agree to leave their employer for a pay-off, but give up their right to go to a tribunal in much the same way as the current compromise agreements. Under the proposals, the 'without prejudice' rule would be extended so that employers can offer a sum of money and a settlement agreement even though there is no pre-existing dispute. If the worker accepts the 'settlement agreement', it will be legally protected and cannot be used later as evidence in any court case or tribunal. Even if the worker does not accept the 'settlement agreement', these conversations cannot be admitted as evidence in unfair dismissal cases unless the tribunal in convinced the employer has behaved improperly.

Usdaw believes that settlement agreements will encourage employers to evade normal procedures aimed at improving conduct or performance. Instead, it will provide employers with in easy route to pushing employees into resigning.

Limiting Compensation For Unfair Dismissal

The coalition Government plans to revise the limits on compensation that can be awarded when workers are unfairly dismissed.

The Government intends to place a cap of 12 months' pay on unfair dismissal compensation. This will be limited at three times median earnings, roughly £77,646. The no limit to the compensation award for discrimination cases will continue.

Usdaw believes that the existing compensation limits should be kept in place as there is no evidence that the current level of maximum compensation for unfair dismissal puts employers off taking on new staff.

Maximum compensation awards should not be linked to annual earnings and tribunals should retain their discretion to award higher compensation to reflect lost future earnings and pensions.

There is also a real risk that reducing the maximum tribunal award will have the knock on effect of reducing the payments made under settlement agreements.

Furthermore, those who are already on low pay will have their maximum level limited at the lowest level. Part-time workers would be particularly affected.