Getting the sack will come with an added price tag – and it’ll be easier to get rid of you and harder to fight back
A raft of changes to the way your employer can treat you will be introduced this summer in a bill that, critics say, will make it quicker and cheaper to sack staff.
The Enterprise and Regulatory Reform Bill has been put forward by business secretary Vince Cable as a measure to help Britain’s struggling businesses and to make Britain more “enterprise-friendly”.
When announcing the proposals, he said: “We want to make sure that the right conditions are in place to encourage investment and exports, boost enterprise, support green growth and build a responsible business culture. The bill will help ensure that people who work hard and do the right thing are rewarded.”
However, staff who feel they have been unfairly sacked will find it far more difficult to get redress. Among the changes will be a cap on compensation for unfair dismissal and the introduction of charges for bringing a claim.
The measures come on top of a recent increase – from one to two years – in the time employees have to work for their firm before they can file an unfair dismissal claim.
The proposal to cap payouts means there will soon be a limit of 12 months’ pay or £74,200, whichever is the lower. Employment lawyer Philip Landau of solicitors Landau Zeffertt Weir says: “This could affect everyone who has a claim for unfair dismissal. Those on the average pay will see far less, and those on higher pay will bust through the cap sooner than 12 months.”
Although typical settlements for unfair dismissal are far less than the cap, the bill also allows the cap to be lowered in future, to between £25,882 – the current average annual salary – and £77,646.
The introduction of charges once the bill is passed will mean workers will have to pay to take their case to a tribunal – which, until now, has been free. The proposed new fees will be £250 for lodging a standard claim and a further £950 if it goes to a hearing.
For someone who has lost their job, the total £1,200 may be a serious hurdle, especially as it comes as help with legal fees is being drastically scaled back.
Jayne Nevins, from legal expenses insurer DAS Legal Services, says: “Workers may seek advice because an employer has started making illegal deductions from their wages, or introduced other unfair terms. These people need help to see whether it’s worth taking a case to a tribunal, and help with preparations.”
But Katherine Maxwell, head of the employment department at solicitors Moore Blatch feels the charges will stop vexatious claims from workers hoping to get a settlement from employers just by threatening them with a tribunal.
Another important change contained in the bill is to “protected conversations”. Once it is passed, employers can take you aside out of the blue, offer to pay you to leave, and you won’t be able to use anything said in the discussion as evidence in any unfair dismissal claim (although this doesn’t apply to discrimination cases, or where your boss has acted improperly by putting undue pressure). The protection is for the employer, not the employee.
At present employers have this protection only once a formal dispute has already arisen such as a prior performance improvement plan, or disciplinary proceedings.
The changes will help employers get rid of staff without having to go through a lengthy formal process.
“A sea change of trepidation could be introduced into the workplace every time your line manger calls you in for a quick chat and you find yourself instead with a quick exit,” says Landau.
Nevins says: “The pendulum has definitely swung too far back in favour of employers. Over time they’re going to realise how much power they have.”
Money | guardian.co.uk
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