Employer’s Charter – Important policy or mere politics?

On the 27 January 2011 the Coalition published two key documents as part of its campaign to support and revitalise private industry - an aspiration that is central to its vision of easing the pain of public spending cuts. Those documents were the ‘Employer’s Charter’ and the complimentary consultation paper entitled ‘Resolving Workplace Disputes’. 

But are these documents the panacea to employee management woes that the business world has been crying out for, or merely political ‘vote-buying’ rhetoric?

The Employer’s Charter made a big splash in the Broadsheets back in January, but in truth its importance and usefulness is much less than its grand title would suggest. A bit of political over-egging by Mr Cameron, one might say!

In truth, the Charter itself is simply a bullet-point list of steps that a business can already lawfully take to manage its staff, a sort-of ‘aide memoire’ if you will, to address a few commonly held misconceptions and to remind businesses that the law can still operate in favour of the employer.

Whilst the Charter does not create new law, it reminds businesses that they can (for example):

• contact women on maternity leave and ask when they plan to return;
• implement redundancies;
• ask employees to take a pay cut;
• reject flexible working requests.

However, the Charter should be read with considerable caution. For obvious political and presentation reasons, it is selective in the general and simplistic statements that it makes. Whilst it is technically true (for example) that employees can be made redundant during a period of downturn, what the Charter does not touch on is the often troublesome process that a business must follow in order to ensure fairness (and where specialist legal advice is recommended). 

In fact, although it has lived very much in the Charter’s shadow until now, it is the consultation paper that is by far the more interesting and revolutionary of the two documents. That paper seeks feed-back from industry about proposed reforms to employment laws and has the genuine potential to change the landscape for businesses. The key proposals set out in the consultation paper are to:

• increase the qualifying period to bring a claim of unfair dismissal from one to two years (to give businesses greater confidence to hire new staff);
• encourage mediation;
• speed up the Tribunal process by allowing judges to sit alone in more cases; and
• provide Tribunals with greater case management powers to tackle weak and vexatious claims.

Also contained within the paper is a pledge to consult separately about the introduction of ‘issue fees’ for Employment Tribunal cases and appeals, similar to those that apply in the civil courts.

These are all matters which, if they became law, would have a very real impact upon the status quo and would redress the balance significantly in favour of businesses.

But there are, of course, two sides to every story and it is questionable, for example, whether an increase in the qualifying period to bring a claim of unfair dismissal would have the desired effect or would simply breed a socially damaging culture of disposability amongst employers and insecurity amongst staff. As a commercial employment lawyer my own view is that an ‘issue fee’ set at a sensible level would pose a far greater and fairer disincentive to spurious claims. However, I would encourage you all to have your say and to contribute to the discussion.

The consultation closes on 20 April 2011 and the paper itself can be found at the website of the Department for Business Innovation and Skills.

For more information about the Employer’s Charter, the Resolving Workplace Disputes paper or any employment matter, please contact;

David Hodge (Head of Employment Law)
Davidhodge@brethertons.co.uk
Tel: 01788 559 559