Julie Hilling
Main Page: Julie Hilling (Labour - Bolton West)
Vince Cable
I am happy to go back and look at the correspondence, but the Federation of Small Businesses, as well as the Engineering Employers Federation, made it absolutely clear that they did not think that was a sensible approach for business.
Julie Hilling (Bolton West) (Lab)
When the Secretary of State says that a great number of people have made representations about employment regulation curtailing business growth, does he agree that it is only 6% of employers who stated that employment regulation is an issue that concerns them?
Vince Cable
I think the hon. Lady is referring to a survey of small business that my Department did. Indeed, roughly that order of businesses ranked that as their top priority, as opposed to market demand and bank lending. Even though it may not be at the top of everybody’s concerns, for many small companies there is a legitimate fear, as my hon. Friend the Member for Bexleyheath and Crayford (Mr Evennett) pointed out, about the tribunal system and the way it functions.
Julie Hilling (Bolton West) (Lab)
I want to speak about the proposed changes to employment legislation, an area in which I have many years of experience and in which I get increasingly frustrated by comments made by Government Members who either do not understand the limitations of current employment legislation or deliberately want to take us back to the days when mill and pit owners could treat their employees like slaves, work them till they dropped, and pay no regard to their health and well-being.
The UK does not have wonderful employment rights; of the 36 richest countries, we come 34th. Only Canada and America are worse. That should not say to anyone that employment rights are holding back our growth. Indeed, we know only too well that when international companies want to close factories in Europe, they close a factory in Britain before they close one in France or Germany because of the cheapness and simplicity of making workers here redundant.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
On that basis, how come it is a German GM factory, not a British one, that is closing?
Julie Hilling
The Minister gives one example, and we could collectively give many examples in which the opposite has happened—many examples over the years when it has been British factories that closed and French and German ones that stayed open.
There is already an inequitable relationship between employer and employee. Before Government Members nod their heads in agreement, let me say that power is still firmly in the hands of the employer. Employers can do as they like as long as they follow simple and fair procedures. If an employer wants to dismiss a worker for misconduct, all they have to do is carry out a proper investigation, allow the employee representation and give them the right of appeal. As long as the employer has a reasonable belief that the employee has done something wrong, they can dismiss them.
Ian Lavery (Wansbeck) (Lab)
Does my hon. Friend agree that it was Beecroft who suggested that it was fine to sack someone if the employer just disliked the employee, and that that was fair?
Julie Hilling
I agree with my hon. Friend that the Beecroft proposals are appalling as they relate to the rights and defence of individual workers. I shall say a little more about that in a moment.
In order to dismiss somebody, the employer does not have to prove that the employee has done anything wrong. The employer just has to have a reasonable belief that it was them. As long as the employer has followed a simple procedure and carried out a proper investigation, the employee has no case at a tribunal. The tribunal will not re-hear or re-judge the case and can find in favour of the employee only if the employer has not followed a fair process. If an employer wants to fire an employee for capability, all the employer has to do is tell them where they are failing and give them the opportunity to improve—again, a simple, fair process.
The employee is not protected if they are disabled or sick. The courts have already said that the employer does not have to behave like a charity. If the employee is unable to fulfil their contract of employment, they can be dismissed. Yes, they may have a case for discrimination if the worker is singled out and treated differently from non-disabled workers, but if a fair procedure is followed and a reasonable adjustment is made if necessary, the worker can be dismissed.
Let us not forget that an employer has two years to decide if an employee is suitable—two years to decide whether an employee is an asset to the company or not. Unless the employer is discriminating on the grounds of gender, race, sexuality and so on, the employee cannot go to a tribunal at all.
I do not believe that we have thousands of bosses out there who want to dismiss workers with no just cause. Why would they, when it costs so much to recruit and train a new worker? Even if we do have rogue employers, they can already dismiss workers on a whim. All they have to do is pay them what a tribunal would give them—redundancy pay, and not even at the rate of the company scheme if it is better than the statutory scheme, any holiday pay and any notice period. The only extra sum that an employment tribunal will ever give is an award for future losses. That is not normally more than six months’ pay and the average is considerably less. To get that, the employee must prove that they were unfairly dismissed and show that they have been applying for jobs with no success.
It sounds as though I am giving a lesson on how to be a bad boss. I am not; I am simply trying to point out how the employer already has massive power. I have lost count of the number of times I have had to use the trade union mantra, “Unfortunately the law is as it is, not as we would like it to be,” when I have had to give the news that an employee who had been dismissed had no case for a tribunal. Let me give the House some examples. A senior manager in the railways was charged with gross misconduct. We fought the charge and he was found not guilty. A month later the employer paid him off— 30 years of service down the drain, limited chances of another job and no chance of going to a tribunal.
A travel centre worker with 17 years’ experience had no problems until her manager changed and she ended up off work with stress. She could not prove that her manager had bullied her, and because the employer followed proper processes, she was dismissed under capability procedure. A worker who had worked for the same company for 30 years was selected for redundancy on the basis of last in, first out—after 30 years—even though this is not allowed to be the sole criterion. His redundancy payment made it impossible for him to go to a tribunal. I could go on and on with examples.
A great deal has been made of the cost to employers. They can get free legal advice from ACAS on all their policies and procedures. They do not need to employ a solicitor at a tribunal. As long as the employer has been fair and has not discriminated, they have nothing to fear. ACAS already offers mediation and I welcome the extension of that, but I believe that the proposed fees for tribunals are wrong and will act as a barrier to justice for those least able to pay. The judge can already make a deposit order of £1,000 to a claimant if the judge believes that there is no reasonable prospect of success at the tribunal.
Let us imagine ourselves in a situation that far too many people find themselves in. They are sacked. They have no idea how they are going to meet their mortgage payments or put food on the table. Then they have to find money to take their case to court. The Government are just so wrong on this. They seem to have missed the point that many claims to tribunals are for very small sums—unpaid holiday pay, no notice pay, or wrongly calculated or no redundancy pay. Such simple cases are already heard by a judge sitting alone and are often worth less than the proposed fees.
The Government are also wrong to dismantle our successful and admired tripartite industrial jury system of employment tribunals and employment appeals tribunals. As the Law Society has stated:
“Lay members add to the concept of justice and they enhance the fairness of the tribunal by bringing practical experience in employee and employer relations.”
As my hon. Friend the Member for Streatham (Mr Umunna) said, the Federation of Small Businesses is wholly against the proposals for compensated no-fault dismissal. It states that it has seen no evidence from countries where compensated no-fault dismissal is in place to demonstrate that it encourages employers to hire. In fact, it believes that it might lead to more employment tribunal cases on the grounds of discrimination, thereby producing exactly the opposite result to the main policy objective.
The FSB also believes that there is a risk of creating a two-tier labour market and, specifically, that lower protection creates a risk that workers will not be attracted to small companies, making it harder for them to recruit. Those taking employment in small firms could be the lower skilled and less productive workers willing to accept lower protection and those finding it harder to access credit, such as mortgages. The FSB also believes that that would fundamentally change the dynamic relationship between workers and their employers and could deflect attention from the need for good management and replace it with a hire and fire culture. I could not agree more.
The Government have stated that they must make changes to the tribunals system because of the rising number of tribunal cases, but the level of single claims, where individual workers make complaints about their treatment, has remained fairly steady—in fact, it fell by 15% between 2010 and 2011. Around 60,000 individual cases a year, of a work force of 26 million, does not seem all that excessive. Anyone listening to Government Members would believe that tribunals were a real cash cow for the employee, but the average award is £5,400 and the average cost to the employer is £8,500.
I welcome the possibility that tribunals could impose financial penalties on employers who break the law. I have never understood why employers can break employment laws with impunity. The law is the law, it seems to me, and those who break it deliberately, especially if they do so regularly, should be punished. I am also concerned by all the statements we have heard from Government Members about health and safety and ask the Minister to assure us that no amendments will be made that relate to health and safety legislation.
The economy is in recession not because workers have too many rights, but because the Government are cutting expenditure too far and too fast, hitting business confidence and choking off growth. Removing the rights of workers will only increase job insecurity, harm work force morale and productivity, and lower consumer confidence. This is not about making it easier to hire workers, but about making it easier to sack them. It is unwanted by responsible business people, unnecessary and yet another example of a Government who are out of touch and have no idea how to govern in the 21st century. It seems to me that they just want to take us back to the 19th century. With 2.7 million people unemployed and more than a million young people unemployed, the Government should simply get a grip.