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The Ghosts Of Employment Law - Past, Present And Future

The Ghosts Of Employment Law - Past, Present And Future

Christmas is often a time for reflection - on the year gone by and what’s in store for the year ahead.  A time when employment lawyers dust off their briefings on the pitfalls of Christmas party season and adverse weather policies!  Personally, I’ve been posting daily employment law tips on Twitter to feature in an advent calendar. There has certainly been no shortage of tips to take us up to Christmas Day...and beyond.

In this time of major change in UK employment law, I’ve been reflecting on the ghosts of employment law past, present and future.

Past

When I started out as a baby employment lawyer, the concept of “employment law” was really just starting to gain momentum as a practice area in its own right.  Commercial law firms were mobilising dedicated employment law teams and the senior practitioners still multi-tasked across different disciplines, particularly litigation.  I trained under one of the leading lawyers in Scotland who, it was said, practiced employment law “before it was even known as employment law”.

The skills-set came from a litigation background and employment lawyers were generally called upon to “fire fight” after an industrial tribunal claim had been lodged.  During my training years, I remember simple unfair dismissal claims being defended with a handwritten response in the box on the IT3 (as it was then known) form to say that the dismissal was fair; that the Respondent had followed a fair process; and that the claim should therefore be dismissed.  Simple. Do we really need much more than that when such cases turn so much on the facts?

In those days, the maximum compensation for unfair dismissal was £11,000 and employment law did not have the profile on the corporate agenda that it has today.  It would not be uncommon for us to be called in to a corporate deal on the night of completion to be asked to pull together a “TUPE letter” to staff or unions.  And executive severance deals were easier to get over the line when compensation was more modest.

Things took a turn when the New Labour government came into power and I began to see the European social laws that I had studied at University (Working Time Regulations, pregnancy discrimination, “fairness at work”, trade union recognition, etc) gradually being implemented in the UK.  With greater regulation on business, a career in employment law beckoned.

Present

For me, employment law is cyclical and the work for HR teams varies depending on where we are in the economic cycle.  In a downturn, we’re busy advising on redundancies and restructuring.  And when economic times are better, the more “positive” change projects, recruitment and restrictive covenant disputes occupy us.  With that, the ebb and flow of business makes for a steady and varied case-load.  That’s still what makes me tick…

We’ve seen various attempts by Governments over the years to assist “dispute resolution” in the workplace. The measures brought in this year have been the most radical that I’ve seen in my career - bringing unprecedented change in the practice of employment law and human resources.  Take the simple unfair dismissal case.  The coalition Government has increased the qualifying period to claim unfair dismissal in the first place from one year to two years.  The maximum compensation for unfair dismissal has been reduced from the lesser of £74,200 to one year’s gross salary (which, for most in society, means the latter).  And, most significantly, the Government introduced a fee regime for tribunal claims which requires claimants to pay fees of up £1,200 to have their claim heard.

Now, all of these developments have been commented on widely by lawyers, bloggers and even the national media.  It seems that everyone now has a view on employment law and whether it’s too easy or too difficult to hire and fire workers.  This year’s changes are good for business and they have reduced the risk profile for HR in managing people.  The flipside is that even the most commercial HR directors that I work with have reflected on access to justice issues and there is no question that we have seen a downturn in employment tribunal claims being lodged.  There are, of course, two judicial reviews challenging the imposition of tribunal fees and the decisions are eagerly awaited.

Future

So, what does this mean for employment lawyers and HR teams in future? I’ve recently finished Richard Susskind’s book “Tomorrow’s Lawyers”.  Susskind predicts significant change in the practice of law over the next three to six years.  A lot of his thinking resonates with the practice of employment law in particular and a move towards de-constructing what we do and how we manage a people problem – or the conduct of a Tribunal claim. 

What will distinguish employment lawyers in future is their ability to support HR professionals as a genuine extension of their team.  I think that employment law advice requires a much closer understanding of the business and sector in which our clients operate than most other areas of legal practice.  The law is fast moving and it applies across business sectors.  But, it is the application of that law to the particular client - its culture, language and unique pressures - that distinguishes us as lawyers who truly “get it” and who can (forgive the cliché) add value to an HR Director as a true business partner.  I think the best compliment I have received from a client is that our team of employment lawyers is no different than having an in-house team of employment lawyers working alongside HR.  Working ‘with’ our clients not ‘for’ them.

So, what about the future for tribunal claims following the introduction of fees?  I predict that the Government will retain lodging fees for tribunals.  However, I don’t think that we can underestimate the intervention of the courts in the judicial reviews and I’m really beginning to think that there may be some modification of the level of fees given the significant drop that we have seen on the statistics and the backlash from trade unions and employment law commentators alike. Despite this, I think there will be a new landscape in the approach to employment tribunal litigation and in time we’ll see the trade union movement and insurance market stepping in to back claimants’ fees for those claims with merit. 

The flip-side of this reigning in of employment legislation (which I expect to continue in the year ahead) is that we are going to see an increase in judge-made law through the courts (in Europe in particular). If I was a betting man, I’d say that holiday-related claims are going to be the most prolific in terms of employment litigation next year.  Just look at the recent decisions domestically and coming out of Europe on the calculation of holiday pay. 

One thing’s for sure - there will always be workplace disputes, boardroom battles, hiring and firing.  So, it’s not all ‘Bah, humbug’ for the year ahead.  I guess it depends which way you look at it!

David Morgan
Partner

LChalmers