It’s time for another reform!

It could reasonably be observed that this government is pretty keen on reform. Departmental websites are festooned with promises of reviews and consultations, most of it apparently in the name of freedom. The NHS is to be fundamentally reformed so we can choose from a multitude of treatment plans, schools are to be given “back” to local communities so we can decide precisely how our children are to be educated and the labour market is to be made more “flexible”.

In service of the last of these aims, the government has already produced an employer’s charter, informing businesses that they are allowed to “dismiss an employee for poor performance” or talk to an employee “about their poor performance and how they can improve”. Now, amongst other things, the government wants to review the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) and the awarding of compensation by employment tribunal in discrimination cases.

Precisely how the government wishes to change these laws is not clear. However, there is a telling sentence, on the Conservative Party’s website, which gives us a clue.  We are told that they want to “review the unlimited penalties currently applied in discrimination Employment Tribunals” (sic. but my emphasis). Note that, for them, it is not “compensation” that tribunals award, perhaps for bullying on racial grounds that leads an individual to leave a well-paid job, or for blatantly failing to make adjustments for a disabled person, which mean that they could not work for many years. No, these are “penalties” that are imposed upon long-suffering employers who are already groaning under the weight of heavy tape laced with particularly poisonous red dye.

Except that the making of awards in discrimination cases is in fact a relatively rare occurrence. In the period 1st April 2009 to 31st March 2010 (the most recent year for which full figures are available), the Employment Tribunal Service’s report tells us that 37,410 discrimination claims were filed. A tiny percentage of these were successful at a hearing, for example, 2% of all sex discrimination claims. And the total number of awards made? 341. Granted, there were some very high awards, but the averages and medians were modest indeed. For example, the average award for sex discrimination was just under £20,000. And this is in a jurisdiction where the winner will have to pay their own legal costs.

So, the government’s notion that disgruntled employees gain untold riches from meritorious discrimination claims, aided by liberal employment tribunals, is a long way from the truth. But the coalition’s reforming zeal, at least in the areas of TUPE and discrimination compensation, will probably end up being obstructed by something far more powerful than prosaic reality. Domestic law in these fields has a strong European underpinning. There is a European directive on transfers of undertakings, with a strong body of case-law from the Court of Justice, by which we are bound. And the UK has to leave open the possibility of unlimited compensation for discrimination so as to comply with the European requirement that those who suffer discrimination have an effective remedy.

There might, of course, be a way round all that pesky European law. But don’t be surprised if, in a few months, the government tells us that it can’t carry out the reforms it wants because of some Brussels bureaucrats and we are treated to the wailing of MPs and certain well-known newspapers about the loss of our national sovereignty.

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