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Legal comment from Pinsent Masons on Government Employment Strategy report due today

Legal comment from Pinsent Masons on Government Employment Strategy report due today

Selwyn Blyth, partner, Pinsent Masons:

“The Government needs to be seen to do something about rising unemployment – and lack of confidence among employers to hire staff is given as a reason for the high level of unemployment.

Likely proposals intended to encourage employers to hire employees are the concept of “protected conversations” and increasing the service requirement to claim unfair dismissal from one year to two years – the Government says these will enable employers to speak frankly to employees about issues such as poor performance and will allow employers more time to assess an employee before s/he becomes more difficult/expensive to dismiss.

But will this lead to more jobs? When it comes to poor performance, currently the more frank an employer is the better – often it is a lack of management intervention that is the problem – so how does a “protected conversation” help? The employer will want to be able to refer to their conversations – the opposite of what the Government is suggesting – so how it would work in practice, and the link to job creation are unclear.

If it is the service requirement to claim unfair dismissal that is inhibiting employers, when it dropped from two years to one year (in 1999) we should see a rise in unemployment – instead unemployment dropped for several years after that – so there is little statistical basis for what the Government is asserting now.

This all seems like a smoke screen for the economic reality of why employers are reluctant to hire staff at the moment – introducing new concepts such as “protected conversations” in to the employment relationship are the last thing employers need – and runs contrary to the Governments reduction of red tape agenda.

There will inevitably be expensive, time consuming litigation about what is covered or not covered, however the concept is framed – a consultation process cannot change this – and it will be an unwelcome surprise for employers.”


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