Fear of employment law damages business

If you had nothing better to do yesterday, or, like me, you are easily distracted, you might have spent an hour or so watching the Twitter row between business dragon Duncan Bannatyne and employment lawyer Darren Newman. In case you missed it, the dialogue is reproduced here and Darren has written an account of the exchange on Xpert HR this morning.

The row started when Darren questioned some of the assertions in this Daily Mail piece on the Equality Act 2010 and specifically Duncan Bannatyne’s suggestion that employers would no longer be allowed to keep employees’ pay details secret. The lawyer’s challenge provoked a furious reaction from the entrepreneur, the details of which can be seen on the Twitter exchange.

Aside from an entertaining row, there is a serious point to this. Duncan Bannatyne, someone who is widely respected by many business people, including me, wrote an article in a national newspaper containing assertions about the Equality Act that were just plain wrong. Because of Mr Bannatyne’s reputation, however, many people will take these assertions to be true. As Darren says:

Writing well and accurately about the Act is a painstaking process and not at all easy – and I know many colleagues have worked hard to ensure that the advice and information they have given is useful and accurate.

Then along comes Mr B with his contribution to the debate – in which almost everything he says about the Equality Act 2010 is wrong, but expressed with supreme confidence. The article also shows an unmistakeable contempt for the misguided souls who have foisted this pernicious Act on businesses struggling to compete in a global downturn. However, by not allowing his ignorance of the subject to temper in any way the strength of his opinion, he has actually done a disservice to those whose side he claims to be on. It is articles like this which contribute to the climate of fear in which small businesses now approach employment law. Employers think that they can’t make any management decisions without taking legal advice. Employees think that they can receive thousands of pounds in compensation for every perceived slight they endure. Those who peddle these delusions then roundly condemn the laws that actually exist only in their own imaginations. I can’t demonstrate that this avalanche of misinformation actually harms the economy – but it can hardly help.

A few weeks ago, I wrote about how the same papers that call for tax cuts actually ensure that the state spends more by creating public hysteria which fuels demands for more government action. Something similar happens with scaremongering articles about employment law. Employers become terrified of draconian laws that don’t even exist, which leads them to overreact when faced with claims. You know how it goes:

Oh God, that awkward woman from accounts has lodged another grievance. Apparently she overheard someone telling a joke about Tiger Woods three years ago, and she claims this proves that a viciously racist atmosphere prevails in the office, and she’s been suffering from the stress brought on by it ever since. And she’s not just black, she’s a woman too! She could take us for double the usual amount, and that’s millions. This is just the sort of thing that sinks entire companies; I read a story about something similar in the Daily Mail a few months ago. Ohmigod, were screwed!!! We’ll get taken to the cleaners, we’ll be branded as racists, the Anti-Nazi League will picket our buildings and we’ll never get local government contract again, ever! Get me the highest QC in the land. If we hand over a massive amount in legal fees, we might just get away with this.

OK, I’m exaggerating but only a bit. Scare stories about employment rights only encourage the chancers to have a go by bringing spurious claims against their employers. They also create a fear of employment law which makes normally level-headed people take ridiculous grievances far too seriously and consult lawyers at every turn when they really don’t need to. Companies end up spending vast amounts in legal fees because their managers are afraid of putting a foot wrong. Sex or race discrimination claims scare the hell out of people. Add them both together and they seem to induce a rabbit-in-the-headlights paralysis among otherwise highly competent executives.

As Darren said in his comment on this post, “Employment law is too important to be left to employment lawyers.” A good working knowledge of employment law is essential for managers. It reduces their dependence on external advisers. This is particularly important for managers in smaller organisations where specialist advice is not on tap. But reading scare stories in the tabloids does nothing to help hard-pressed business executives. If anything, it is more likely to increase their dependence on the very people Duncan Bannatyne complains about having to employ – HR people and lawyers.

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3 Responses to Fear of employment law damages business

  1. Pingback: Fear of employment law damages business - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Pingback: How likely are you to get sued for discrimination? (Part 1) | Mrs Markleham

  3. Gene Perez says:

    it seems that it has gotten to the point that anyone can sue anyone about anything now ,,, even thinking it or look like you are thinking it can get you sued..

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