Vexatious employment claims – a vicious demon or a Will-o’-the-Wisp

A very good piece from John Read at XpertHR on George Osborne’s call for evidence on compensated no-fault dismissals. (See previous post.) The evidence, says John, has been elusive so far.

There is something Will-o’-the-Wispish about this whole question. There is a lot of shouting about the problems employment protection causes but when you try to pin down the evidence everything suddenly becomes very vague.

I’ve done this to death on here but it’s worth repeating that there is very little evidence to suggest that removing employment protection would have much effect on an already low regulation economy like Britain’s. Whatever is holding our economy back, it’s not red-tape.

But how much impact do vexatious litigants, lead-swingers and other trouble-makers have on individual firms?

Employment lawyers and managers tend to have slightly different views on this subject . As John Read, a lawyer, says:

[R]easonable employers can dismiss employees already with little or no risk of being “sued out of existence” – who is Osborne trying to protect? Unreasonable employers?

Which is true. If employers behave reasonably and treat their staff well they have nothing to fear from employment protection.

And yet, and yet….

Those of us who have spent any length of time managing people in organisations know that there are some people who, even though they haven’t got a cat in hell’s chance of winning, will still try to take their employer to court in the hope of forcing an out of court settlement. A good friend of mine calls them “please send money” letters – those baseless grievances that tell you someone wants to pack their job in but wants some cash before they go.

And then there are the few people who think they have a religious or political point to make, no matter how weak the evidence.

It is true that reasonable employers will rarely lose such cases. The high-profile religious discrimination ones, for example, have almost all failed. But it doesn’t alter the fact that organisations have to spend a considerable amount of management time and expense fighting them.

Lawyers are right to say that reasonable employers are unlikely to lose but managers know that even the no-hope cases can be extremely expensive, irritating and disruptive.

But it is here that the story takes on that Will-o’-the-Wisp quality. Just how much damage does vexatious legislation, or the fear of it, do to organisations? Has any small company been tipped into bankruptcy by an employee bringing a vexatious claim? Can reasonable employers really be “sued out of existence” as George Osborne claimed earlier this week?

There is a world of difference between something we find irritating and something which makes a material difference to our business or to the economy as a whole. I hate regulation. Most people who run businesses do. It’s annoying and it gets in the way. Serial grievance raisers have, from time to time, had me grinding my teeth with rage and frustration. But, in the grand scheme of things, do they really make that much of a difference? Or are they just a minor irritation? What do they really cost us?

Business regulation is a bit like the speed limit. It’s here to protect people from careless or aggressive behaviour. I don’t like speed limits and traffic cameras either. They stop me doing what I want. But I can absolutely see why they need to be there. I can also see that the ‘raise the speed limit to boost the economy‘ argument is so spurious it’s not even worth refuting.

Just because we find something irritating or inconvenient it doesn’t mean that there is an economic or a business case for removing it. Taking away people’s employment rights and restricting their access to tribunals is a big step. The fact that trouble-makers, religious zealots and others try to abuse the system is annoying but it’s not, on its own, a reason to change the law.

The government seems determined to ‘do something’ about employment protection but it’s not sure what. We were told that Adrian Beecroft’s proposals had been canned but they seem to have resurfaced again. The reason, I suspect, is that the ministers are finding it difficult to pin down the problem. There is a lot of noise but not a lot of firm data.

George Osborne has called for evidence but I wonder how much he will get. Will he find proof of serious damage being done to companies by employment law? Or, as he looks more closely, will the demons of vexatious claimants and grasping lawyers just fade away before his eyes?

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7 Responses to Vexatious employment claims – a vicious demon or a Will-o’-the-Wisp

  1. needs2cash says:

    Employees whose work adds value that is worth three times more than they are paid have nothing to fear.

    Others had better become competent in work that does instead of seeking employment protection.

    What is the cost of keeping people in jobs that add little or no value? As you can imagine this is difficult for a country to measure this…

    …better to help everyone get used to “at will” employment.

  2. Annabel Kaye says:

    Bit confused about how making it easier to sack people reduced unemployment. Will making it easier to kill people increase life expectancy?
    That aside, often I win a difficult case that was near run thing. The respondent client then declares it was all a waste of time and ‘vexatious’. They have, despite reports, concerns etc, no idea of how close they sail and think their victory was inevitable and natural and the oppononent vexatious with no prospect from the off of having won. This feeds the ‘vexatious’ argument in its own right.

    I do meet organisations who fear doing anything to particular individuals and let them run amok. The longer it goes on the longer it takes to fix, though it can be done. Those serial complainers often have issues that cannot be remedied in a court of law, but that does not mean their feelings are always being brought to the fore to irritate the boss. Some people are argumentative, complaining, irritating and never satisfied – that’s true. Those people can be handled – with a plan!

    People are people, the good, the bad, the ugly, the great performers, the laz, the truculent and the indifferent and we have to manage them all in the workplace, whatever the law.

  3. Pingback: Vexatious employment claims – a vicious demon or a Will-o’-the-Wisp - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  4. John Read says:

    Many thanks for the link to my post.

    I agree, particularly with this part of your piece:

    Just because we find something irritating or inconvenient it doesn’t mean that there is an economic or a business case for removing it. Taking away people’s employment rights and restricting their access to tribunals is a big step. The fact that trouble-makers, religious zealots and others try to abuse the system is annoying but it’s not, on its own, a reason to change the law.

    Although my experience is almost wholly legal rather than managerial, I know that it’s a major pain for employers, particularly small ones, to deal with claims at all, let alone ones that it considers to be baseless. But once the “boost the economy” rationale is removed from the debate (as Flip Chart Fairytales has comprehensively demonstrated it should be), what we’re left with is – as posted above – whether or not claims against small businesses do actually result in them being “sued out of existence”.

    I would not be surprised if there are businesses that have had to close as a result of costs arising from tribunal claims. However, even if the evidence does suggest that this happens, how will it demonstrate whether or those claims are vexatious/unfounded/etc? If the evidence doesn’t show that, then it would seem meaningless in this context – otherwise, is the Government really suggesting that employers should be protected from being sued where the claims are valid? And if the evidence does indicate that these claims are vexatious etc, isn’t that simply the employer’s side of the story?

    Osborne’s phrase “the right not to be sued out of existence” is emotive rhetoric, and just serves to cloud the lack of precision in this debate, as highlighted in the original piece above.

  5. Alan Crowe says:

    > Most people who run businesses do.

    You are thinking about the wrong audience. Britain has too many employees and not enough employers. What we most need is for some of our experienced and able employees to change side in the labour market and become employers. The Government needs to be looking to employees (not employers) and finding out what it is that puts them off becoming employers.

  6. Dannytheoldhamgooner says:

    I think it tends to be merely anecdote based evidence, much like the Polish plumber. I personally work for a company with a less than stellar HR policy and to my knowledge they have only paid one of these types of claim. They have however paid quite a few legitimate claims.

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