The Courier & Advertiser (Fife Edition)
New employer-friendly measures need ironed out
TAYSIDE EMPLOYERS have been told that new legislation to protect businesses when making settlement agreements should change the way that companies conduct difficult discussions with employees – but may also have some negative side effects. From the end of this month an employer will be able to ask an employee to leave under a settlement agreement without the employee being able to use anything said in the conversation to support a claim for unfair dismissal.
Leading employment lawyer Ben Doherty, of Lindsays (incorporating Shield & Kyd), welcomes the changes, which come into effect on Monday, but added they “may have unwelcome side effects”.
In future, employers can have pretermination discussions which will not be admissible in evidence before an Employment Tribunal unless there is improper behaviour or undue pressure involved. The statutory maximum that a tribunal can award in compensation for an unfair dismissal will reduce from the current cap of £74,200 to the lesser of £74,200 or the claimant’s annual salary, and unless they are exempt, claimants will have to start paying fees to lodge a claim in the tribunal and again before a hearing.
The measures are some of the employer-friendly changes being introduced by the coalition government. Doherty commented that: “In most situations they should enable employers who want to avoid tribunal claims to reach an acceptable mutual agreement for less than has previously been the case.”
The changes have been described as a bullies charter by their opponents and whilst they will be welcomed by most employers there may be more litigation rather than less as employment lawyers, the unions and the tribunal iron out some uncertainties contained in the drafting.
Doherty said employers should continue to be cautious when discussing termination of employment as Protected Conversations only apply in ordinary unfair dismissal claims, and do not apply to automatic unfair dismissals, discrimination or other employment law claims.
Employers will be required to give the employee 10 working days to consider any offers made for the termination of their employment, failure to do so would be regarded as undue pressure when the discussion would lose its protection and become admissible in evidence in any employment tribunal claim. In addition, for any agreement to be binding it will still need to be recorded in writing and meet certain statutory requirements.
As the new law does not apply to automatically unfair dismissals or discrimination claims Doherty commented that we may see an increase in those types of claims. “The new legislation does not apply to cases were the claimant brings such a complaint. Therefore claimants may allege they have been automatically unfairly dismissed to enable them to rely on what would have been a protected conversation.”
In addition the tribunal also frequently deals with unfair dismissal claims which also allege a breach of contract. Doherty commented: “Se may have an absurd situation where a tribunal is allowed to hear evidence in respect of a breach of contract claim whilst having to ignore it when considering the unfair dismissal claim. How the Government can expect the tribunal to forget evidence they have heard is beyond me.”