Legislation on employment law is effecting UK engineering businesses...
The degree of protection offered to employees by the law is a vexed political issue. Depending on the government of the day such restrictions are either a vital safeguard against corporate greed or a barrier to free enterprise. But given the state of the UK and European economies is it now time to relax labour law to give businesses more flexibility to compete on the world stage?
A key provision in UK employment law is the right not be unfairly dismissed. A dismissal is unfair if it contravenes the requirements of the Employment Rights Act 1996. Dismissals can be automatically unfair, for example if the decision to sack an employee is based on one of the ‘protected characteristics’ set out in the Equalities Act 2010 or because the worker is pregnant. The length of service of the worker is irrelevant when considering whether a dismissal was automatically unfair.
Otherwise dismissals will be lawful so long as the employer has followed a fair procedure, acts reasonably and has a fair reason. Fair reasons include reasons related to the employee’s conduct, capacity to do the job or qualifications. Unless the employee is claiming a dismissal was automatically unfair, he or she must have worked for at least a year to enjoy the right against unfair dismissal, although this period was extended by the coalition government to two years if the employment started on or after 6 April 2012.
This extension was welcomed by employers, many of whom feel the system has swung too far in favour of workers. Employment Tribunals received 218,000 claims in financial year 2010-11 alone. Complaints of unfair dismissal accounted for 28% of the individual grounds dealt with by the tribunals during this period.
The UK economy is currently in recession and many fear the next GDP figures will confirm a third successive quarter of negative growth. The crisis afflicting the Eurozone is widely viewed as a drag on the UK economy’s ability to recover. The huge uncertainties over the outcome and extent of this crisis are denting consumer confidence and causing businesses to take an overly-cautious approach to any new investments.
Against this back business leaders argue that we cannot afford extensive labour laws currently in place. Whilst trade unions counter that it is during the bad times when resources are stretched that these protections are especially necessary, the majority of employers take a different view, asserting that they should be given greater freedom to sack employees in order to remain competitive.
Nearly all sectors of the UK economy are in direct competition with emerging economies that don’t afford their workers equivalent protections. This in addition to the fact that such nations, particularly India and China, also have vastly superior manpower at their disposal. If the UK is to bounce back and compete then it may be time to re-visit our employment laws to offer businesses more flexibility in this new environment.
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