10 May 2011
Government proposals to review work laws unlikely to lead to any real change
It is reported that George Osborne will announce, today, that the Government will conduct a review of areas of employment law which are perceived as burdensome by employers. These are: the obligations to consult for up to 90 days in connection with proposed redundancies, in advance of a transfer of a business which is governed by the Transfer of Undertakings Regulations and the ability of a tribunal to make awards of compensation in discrimination cases which are not subject to any cap on amount. Lawrence Graham's head of Pensions and Employment, Yvonne Gallagher, commented:
"Whilst it is undoubtedly right to recognise that businesses are concerned by these requirements, and that they can be cumbersome to operate in practice, it is right also to note that the Government's freedom to make any meaningful change is almost completely circumscribed by the fact that all of these issues have their roots in EU legislation and decisions of the European Court.
"Older readers might recall that compensation for discrimination claims was subject to the same cap as unfair dismissal until the early 1990s, when this provision was struck down by the European Court as being contrary to the equal treatment provisions of the Treaty of Rome, denying those workers who were the subject of unlawful discrimination an adequate remedy for their losses. Consultation obligations in relation to redundancy and transfers of business, including outsourcing, are governed by EU Directives which again are binding on the UK.
"Today's address to the Institute of Directors therefore is likely to be more about political positioning than any real change in legislation."