UK Employment Law Is No Longer Fit for Purpose!

By Donna Obstfeld

I’ve been upset about something for a while. Well, “upset” is something of an understatement. “Furious” might be more appropriate. As an EC member, you’ll probably feel the same way.

I’ve been in Human Resources (HR) for over 20 years. 10 years ago I set up my own business. I didn’t have a clue what I was going to do with it or what it could become, but it was mine. I knew I didn’t want to be an HR Manager for a large business, I wanted to help small businesses grow and through their staff, achieve greater success.

Over time, my own business grew and like so many of my clients, I had to decide whether to take on staff . This was absolutely terrifying. Could I generate enough income for two of us? Would my clients trust someone else with their HR? How do I transfer my approach to managing employees to my team?

Fortunately, being in the profession, I knew how to do the people things ‘right;’ how to hire, how to induct, a contract of employment, how to monitor performance etc. But I was still scared. They were employees, so bound by my policies and procedures, invested in – in terms of training and coaching, and supported with their personal development.

As time has gone on, my business model has changed, we have expanded and the inflow of work is more sustained, but I still have concerns and I believe that all small business owners feel the same:

    • What happens if someone thinks they have been treated unfairly?
    • What happens if someone resigns and fails to work their notice period?
    • What happens if someone leaves and takes my clients with them?
    • What happens if someone leaves and takes my staff with them?

These are realities for almost all my clients and some have had to shut up shop as a result!!! Contracts of employment are great because, if written properly, they set out certain rules, policies and procedures which employers and employees commit to when signing the contract. However, as I warn my clients, they are not worth the paper they are written on unless they are enforced.

 

Let me describe a scenario based on a real client:

A firm of gardeners. Employees were provided with tools and a van. The employer came in one Monday morning to find the van unlocked in the yard with a note from an employee saying “I quit.” No notice provided. The employer then had to cancel and reschedule work at very short notice.

If the employee had been fired, the employer would have had to pay 1 months’ notice or the employee could take him to an employment tribunal for failing to do so. However, in this instance it is the employee who has breached his contract and not given the required notice, but what options has the employer got? In reality, none!

The situation gets worse – over the next few weeks, the business owner starts to receive cancellations from clients no longer wishing to have their gardens maintained by the company. No one would say why, but a pattern emerged. They were all clients who had been serviced by the former employee. Not only had he left without notice, he was poaching clients as well.

What options does the employer have? Well he could try to take out an injunction, but if the clients choose to leave, that is their right. They can purchase their gardening services from whomever they wish. Same gardener, same services but cheaper… why wouldn’t you?

I believe there is, but it requires a change in the law. Theresa May’s 10 point plan for the post-Brexit UK economy ‘supporting businesses to start and grow’ is one of her main objectives for Government intervention. This points towards the entrepreneurs, the micro and small business owners, those which account for 99.3% of private businesses in the UK and employ over 15.7million people.

With Brexit around the corner and a once in a generation opportunity to create our own laws as we come out of Europe, this is the time to really look at our employment legislation and to balance the needs of employers and their businesses with the protections required for employees.

Frances O’Grady of the TUC together with other Trade Unions and their officials claim that the fees that an employee must pay to take their employer to an employment tribunal are unfair, prohibitive and should be scrapped. There is a consultation taking place right now on this matter and while the whole subject of employment tribunal fees is under review, I ask the question “is the system of employment tribunals even fit for purpose?”

The TUC asserts that Employment Tribunal claims have dropped since the introduction of fees and they have, but not for the reasons that the TUC and others would have us believe. The figures have fallen because employers want to get on with running and managing their businesses. Business owners do not have the time, money or energy to fight considering the risk of losing, the costs of solicitors to defend the case or the time wasted in preparing for an employment tribunal just because an ex-employee has decided to take a chance.

They are after a settlement. Their solicitors often don’t want to settle as they earn more from defending a claim in an employment tribunal, but the employee wants a quick pay-out and I frequently come across people who have already taken one employer to a tribunal (or threatened to). Employers end up paying to make the employee’s claim go away, to know what the financial impact is as a fixed amount or to enable them to move on and focus on their business.

There are lots of different systems across the world and while some are better than others, if this government is serious about enabling small businesses to grow and succeed, the noose must be removed from around the neck of business owners and the laws need to be equalised between employer and employee.