An opportunity missed
Published 05/06/2012 | 08:00
Northern Ireland must continuously enhance its reputation as being a good place for business.
This means developing an attractive corporate tax structure, radically improving planning criteria and ensuring that the labour market works fairly and efficiently.
There is an under-reported critical theme on labour market legislation and rules which is coming from many employers, possibly more from the smaller and medium sized than the larger businesses.
Just a mention of facing a full employment tribunal case, or ending the employment of an unsatisfactory employee without being charged with unfairness, leads to serious expressions of private grief.
Opportunities for business recoveries from administration may be stalled by unnecessary aspects of TUPE (transfer of undertakings protection of employment) regulations.
Employer and trade union representatives start from an agreed baseline. No one wants to be anything other than fair. The issue is one of procedures. Our institutional arrangements are too time consuming, cumbersome and procedure constrained and can be too costly.
The Department for Employment and Learning (DEL) has just published a review of employment law in Northern Ireland which takes a complacent view of the present position.
Vince Cable, UK Secretary of State, and Adrian Beecroft, adviser to the UK Government, have each made suggestions for change in GB. Adrian Beecroft has attracted criticism for being 'right wing', but his points are cogently argued.
There is a long list of employment law issues, formal and less formal, which might with advantage be improved. However, for an immediate priority, the ideas on tribunal reform and streamlining claims of unfair dismissal also merit some consideration.
DEL draws attention to the modest internal procedural reforms that have been taking place and are under consideration for industrial tribunals. The original conception of the role of tribunals was that they should be more conversational and informal arrangements; over the years, tribunals have become formal and often rely on legal representation of the parties in dispute.
Efforts to minimise formal referrals to a tribunal by inserting opportunities for mediation, conciliation and arbitration have helped, but insufficiently.
Ideally, conciliation and arbitration by skilled specialists should be a professional and speedier alternative to tribunals.
It should be an alternative but not an extra option which might lengthen decision making.
Acceptance of conciliation and arbitration as a route to fair answers needs to be strengthened by the introduction of deterrents to recourse to tribunals. A framework of deposit fees, charges and penalties for unjustified claims, including costs levied on rejected claims (and refusal of conciliation recommendations) offers a balance of both incentives and disincentives.
The most high profile employment law topic, currently under debate, relates to the right of an employer to dismiss an employee and dealing with circumstances where dismissal is legally unfair.
And Northern Ireland remains out of step with GB which has amended the qualifying period of employment to be eligible to claim unfair dismissal from one to two years.
Each year, there are over 2,300 claims of unfair dismissal registered in Northern Ireland. About 400 are withdrawn as a result of conciliation (presumably mainly by some informal agreement or recognised to be unjustified) nearly 300 go for a tribunal hearing and 1,700 settled by conciliation.
The main concern is that the costs of tribunal representation to an employer give a powerful disincentive to going to a tribunal over the matter.
DEL has offered no firm suggestion for changes in Northern Ireland. It is 'interested in the views of stakeholders'.
Beecroft, for GB, suggests a new provision which would allow an employer to use a 'compensated no fault dismissal'. This would pay an employee, believed to be unsatisfactory, the payment that they might have received if made redundant.
An additional idea is that micro-businesses - those with less than 10 employees - should lie outside the provisions of many current employment regulations.
The Employment Law Discussion Paper by DEL shows little real leadership in a complex area. An opportunity to show progressive improvements has been missed.