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?