Employment law – who does it favour ?
Employment law is one of the most fast changing and interesting areas of law in our opinion.
What makes it so fascinating is it’s interplay with politics. Bearing in mind many millions of the voting population are also employees, when set against the fact that the business community are a vital part of the economy and source of funding for political parties, this area of law is always going to be finely balanced.
In reality, English employment law, in terms of the underlying law on the big areas such as unfair dismissal, largely favours the employer. As long as the employer acts within a “range of reasonable responses” in any given situation, and complies with appropriate procedure, dismissals will be fair. Yet, whilst the law may favour the employer, there is so much employment law, it changes so fast, and the procedure in Employment Tribunals is favourable to employees. All of this means that employers have to spend significant time and money in complying.
Perhaps the best example of how employment law, in terms of practicalities, favours the employee, is the current no-costs rule in the Employment Tribunal. Generally, with litigation, frivolous parties and claims do not bring cases because of the cost of court fees and threat of having to pay an opponent’s costs if a case is lost. Neither of these apply in the Employment Tribunal, subject to exceptions, so employees are encouraged to “have a go” at the taxpayers or employers expense. An employer faces the choice of settling even weak cases or wasting money on legal costs defending, with little chance of recovering those costs.
So, ask an employer whether employment law favours the employee. As a recent survey shows, the answer is overwhelmingly yes.
Pinsent Mason solicitors recently asked this precise question and a huge 97% of a fairly small sample of employers, albeit big employers with generally more than 500,000 employees, answered that they consider employment law is highly skewed in favour of employees. On the other hand, employees may feel encouraged to make claims, but a good employment solicitor will need to make it clear to the prospective client that the underlying legal tests largely favour the employer and that if an early settlement, albeit for a modest sum, and perhaps involving a compromise agreement being signed, is available, this is often a better option. This is particularly the case since, like most areas of English law, employment law generally relies on the employee suffering financial loss in the form of ongoing loss of earnings and does not award large damages for injury to feelings, even in discrimination cases. There is a duty of mitigation for employees, who need to be actively looking for work even if unfairly dismissed and need to be able to prove this to the Tribunal. Consequently, the average award in the Employment tribunals tends to be less than £10,000.00. After paying lawyers fees (don’t forget, the no costs rule works both ways) many employees would have been better off with an earlier settlement as a means to an end.
Returning to Pinsent Mason’s survey findings, here are some additional interesting points :-
- Around 2/3rd of employers advised that the perceived threat of a tribunal claim impacts on everyday management decisions.
- Employers feel that the Tribunal system takes too long and too many cases are cancelled at the last minute due to Tribunal overlisting on the basis that many claims will settle at the last minute.
- Over 80% of employers would favour mediation over Tribunal cases
- Government proposals to lengthen the time that employees need to have worked to qualify for bringing a claim from 1 year to 2 years received 65% support.
