The Employment White Paper: Important changes which will impact on most employers, covering unfair dismissal, fixed-term contracts, union recognition and family-friendly policies

Anthony Fincham considers the Employment White Paper

A major client of ours (one with recognised trade unions) commented to me the other day that he thought that the long-waited government White Paper on employment law would make little or no difference to their practices. There is certainly nothing revolutionary in the varied proposals, but I don't think any employer will be entirely untouched. A characteristic of the White Paper is that it is long on generalities and short on detail (47 loosely typed pages for £7.45 strikes me as poor value) but I will mention in this brief piece what I think are the important changes which will impact on most employers.

Unfair dismissal
The qualifying period is to go back to one year - possibly a pre-emptive strike before the European Court rules on the legality of two years - and the cap on the compensatory award (which has been around since 1972 but has failed to keep track with inflation) is to be scrapped. Unfair dismissal will therefore join with sexual and racial discrimination in giving rise to potentially unlimited awards for compensation unless rumours that a cap of £50,000 may apply are correct. Curiously there is no proposal to abolish or increase the £25,000 limit on wrongful dismissal actions in an employment tribunal. But they may fade in importance under the new regime. Equally, the length of notice periods may be thought of as less significant; after all, both unfair and wrongful dismissal compensation is subject to a duty to mitigate, and the latter will now be unlimited in amount as well as in time. Quite how this works out in practice remains to be seen. Employers will surely take ever greater care to ensure substantive and procedural fairness of all dismissals.Fixed term contracts
It might immediately be thought that a way around unlimited compensation will be to concentrate on fixed term contracts, taking advantage of the present law which allows unfair dismissal rights to be excluded in a fixed term contract of one year or more. The government invites views on whether this loophole should be closed - which would reverse the effect of the recent Court of Appeal decision in Kelly-Phillips -v- BBC which held that a fixed term contract from which unfair dismissal rights had been excluded can be extended without losing the benefit of that exclusion. If you have views on this, write to the Minister!

Union recognition
This is perhaps the most vexed question, at least apart from the minimum wage which is not strictly a White Paper matter although mentioned in it. One of the anti-union measures of the Thatcher era was scrapping the machinery whereby a union could enforce recognition against an employer. The White Paper proposes restoration of that right where a majority of the relevant workforce desires recognition and at least 40% of those eligible to vote are in favour. A procedure will encourage agreement but give powers to the Central Arbitration Committee to rule if necessary. Firms with 20 or fewer employees are excluded. The government also proposes to grant unfair dismissal rights to persons dismissed for taking part in lawfully organised official industrial action. The present position is that no claim can be made unless an employer either dismisses or re-employs strikers selectively. There will also be new laws preventing any discrimination on grounds of trade union membership, non-membership or activities and a long overdue legal right for employees to be accompanied by a colleague or trade union representative during grievance or disciplinary procedures.

Family friendly policies
There is a rag-bag here. Maternity leave is to be extended to eighteen weeks to align it with maternity pay. Employees will have rights to extended maternity absence and to parental leave after one year's service. There will be three months parental leave for adoptive parents. There will be rights to reasonable time off for family emergencies applying to all employees. And, as one would expect, there will be protection against dismissal or detriment for people exercising these various rights.

Conclusion
I think those are the main proposals, although the summary at the conclusion of the White Paper lists twenty-nine. Pace the view expressed by the client, I think they will at least bring about a change in the approach to dismissal and perhaps we will see something of a trade union comeback.