Margot James
Main Page: Margot James (Conservative - Stourbridge)
Margot James (Stourbridge) (Con)
I welcome the many excellent measures in the Bill that lay the foundations for a low-carbon economy, with the green investment bank being established and the proposed changes to the competition regime, which should simplify matters for business and reduce costs.
I want to focus on the employment law reform provisions, however, as that is the one part of the Bill on which I hope the Government will be persuaded in Committee to move. I want them to go a little further in redressing the balance in law between employers and employees. In no way do I seek to establish some sort of “hire and fire” culture; I very much agree that that would be to the detriment of not only employees, but business. However, I welcome the provisions enabling disputes to be resolved at a much earlier stage, without the need to go to an employment tribunal. That will be a help to both employer and employee, and it is anticipated that 25% fewer claims will end up going to a tribunal as a result, which will save public money and company time and resources. We have also heard this afternoon that any employer offer of a settlement earlier in the process will no longer prejudice the company’s position in any subsequent tribunal hearing. That is a welcome development, and I look forward to hearing further details.
Contrary to the fears that some Opposition Members have expressed, nothing in this Bill changes an individual’s statutory employment rights, but that causes a degree of concern to many of us who have been in business and therefore know how far the balance has tilted towards the rights of the employee, especially in unfair dismissal claims. I took some soundings from people with whom I have in the past been in business, and I want to quote the comments of somebody who does not want to be named. She told me:
“Tribunal culture in the UK means the employer is on the back foot. We have agreed to pay off employees (who have appointed no win-no fee lawyers) that have threatened to take us to court, even when they have no real case, as the amount of time/energy it takes us to fight our case at a tribunal is too high, even when we as employers think we are in the right. This area I feel is the most onerous for me as an employer currently. And for someone with a social conscience, I don’t like paying someone off when they are in the wrong, just because it is the most cost effective thing to do for the business.”
Research by the chamber of commerce among firms employing between 10 and 49 people has confirmed what that individual told me. It revealed that 21% of respondents had been threatened with an employment tribunal in the previous three years, and of those 37% had opted to settle out of court. Many employers of fewer than 20 people simply cannot afford the specialist HR resource required to enable them to defend their position in a tribunal. Only 20% of respondents to the survey defended their claim, and although it was heartening to read that, of those, three quarters won their case, some of the comments quoted verbatim in the research are salutary. One HR director said that he
“cannot emphasise enough how burdensome and draining it is to dismiss people who are performing very poorly or are abusing the rules.”
Another said:
“We won our claim, however the stress was off the scale, it cost our company over £20,000 for something that was never our fault.”
I welcome the review of a related matter—health and safety regulations—being undertaken by the Department for Work and Pensions. That has a considerable bearing on employment law. Although it is beyond the scope of the Bill, I hope that Ministers will confer with their DWP counterparts, as 54% of respondents to that chamber of commerce survey cited concerns about the operation of health and safety rules. A company in my constituency employing between 100 and 150 people, even though it is in many ways a model employer, suffers two or three cases a year of vexatious claims by employees, and even ex-employees, who have created a spurious claim based on an accident they had at work. The company is then in the position of having to prove to the court that it created proper conditions that should have prevented the accident—the onus is on the company to prove that it took adequate measures. That is but one example of the many areas beyond unfair dismissal where, I believe, the rights of the employee are now too far out of kilter with the rights of the employer.
Julian Smith
I think my hon. Friend gets an extra minute for taking my intervention. Does she agree that there is an impact on growth, because when a small company is having to deal with all these issues in employment tribunals, it is not able to focus on creating more jobs and growth? That is what Opposition Members sometimes appear to fail to understand.
Margot James
My hon. Friend makes a good point. The problem is not just the cost of defending claims, but the management time involved. That detracts from the energy that companies need to fight in the market for business. There is no doubt about that.
Mr Binley
I am most grateful. Does my hon. Friend recognise that, for some small businesses, two days and the prior work necessary to attend a tribunal cost £10,000? Many shy away from taking that course, even though they think they are right, because they simply cannot afford that.
Madam Deputy Speaker (Dawn Primarolo)
Order. It is quite true that the hon. Lady gets extra time for taking interventions, but of course that takes time from Members who are waiting to speak. Mr Binley and Mr Smith, you might remember that.
Margot James
Thank you, Madam Deputy Speaker. I am conscious of that and I will not take all the additional time allotted.
My hon. Friend the Member for Northampton South (Mr Binley) made a good point. The cost in time and money of fighting claims is a huge disincentive, especially to very small companies. That is why I believe we should give micro-businesses special consideration and partial exemptions from some of the measures in the Bill. I hope that the Government will take on board the views expressed by my colleagues and I today, and the concerns voiced by the many reasonable employers who try to do the right thing by their work force. The volume, complexity and, I believe, bias of current law, which allows vexatious and sometimes spurious claims to be brought in the first place, is what needs to be changed fundamentally, alongside the very good measures the Government propose in the Bill.