Last week, business secretary Vince Cable announced that the government is to adopt several reforms proposed by venture capitalist Adrian Beecroft in a report published in May.
These include a cap on the amount of compensation employees can receive for unfair dismissals and the introduction of fees for taking employment disputes to tribunal.
While some have claimed the reforms could help remove employers’ fear of litigation and encourage them to take on new staff, others say they represent a serious erosion of employee rights.
Writing in the Guardian this week, Anya Palmer, a barrister specialising in employment law at Old Square Chambers, argued the reforms give employers scope to mistreat staff and could possibly lead to workplace discrimination going unpunished.
“It’s a licence to treat people badly and still pay less,” she commented.
Ms Palmer noted that the cap on compensation would affect lower paid workers in particular, with the proposal being to reduce the maximum compensatory award from its current level of £72,300 down to median pay (£26,000) or one year’s salary, whichever is lower.
“So the cap on compensation would be slashed by two thirds, more for low earners, because half of all workers earn less than £26,000. For someone who earns only £15,000, the cap would be £15,000.”
However, fees for taking an unfair dismissal claim to tribunal could have an even bigger impact by deterring staff from challenging their employers even in genuine cases of discrimination.
“For bigger claims such as unfair dismissal or discrimination the total fees will be £1,200,” she said.
“There can be no doubt the aim is to deter claims, and the fees will undoubtedly present an insurmountable hurdle for many claimants.”