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Employers must still follow rules

Employers could still face discrimination claims if they didn’t ‘stick to the rules’ in dismissing staff under new proposals put forward to reform employment practices a legal expert has warned.

Barry Hutchinson, an associate at Gordon Brown Law Firm in Newcastle, believes that while the planned reforms offer employers greater control in managing departures, unfair dismissal claims could still arise if the process was not handled correctly.

The proposals, included in the second reading of Vince Cable’s Enterprise and Regulatory Reform Bill, reject the idea of ‘compulsory no-fault dismissals’ in favour of a voluntary scheme in which employers and staff can sign settlement agreements.

The Government is encouraging this approach to enable frank discussions between employer and employee about an early termination of an individual’s employment without prior process or the fear of a subsequent tribunal claim.

Barry explains: “The planned changes, which include the new ‘settlement agreements’, certainly make employment laws more flexible for employers at the same time as protecting the basic labour rights of employees.

“For employees, this is far better news than the original ‘fire at will’ plans advanced in the Beecroft report which would have allowed employers to dismiss underperforming staff without any prior process.

“However, while such a step offers employers a more controlled environment in which to manage employee departures, they would still need to be very careful if there is any risk of a discrimination claim.

“The proposals only seem to give protection and simplicity to businesses during a straightforward dismissal. If there is a threat of discrimination, the discussions of compromise agreements could still be referred to in a tribunal. They would still need to follow correct procedures.”

The plans, which would come into play next summer, aim to make employment law simpler and encourage companies to hire workers. Also included is a proposal to scrap the maximum compensation cap for unfair dismissal.

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This was posted in Bdaily's Members' News section by Gordon Brown Associates .