Corporate Law Outlook

Citation

Paget, P. (2012), "Corporate Law Outlook", Strategic Direction, Vol. 28 No. 4. https://doi.org/10.1108/sd.2012.05628daa.002

Corporate Law Outlook

Article Type: Corporate Law Outlook From: Strategic Direction, Volume 28, Issue 4

Prime Minister’s workplace conversation proposal would prove counter-productive

The Prime Minister’s recent proposal that employers should be able to have “protected conversations” with employees could prove to be counter-productive.

Mr Cameron has acted for the right reasons but come up with the wrong solution, which, if implemented, would lead to a rise in litigation.

As part of his totally justified quest to find ways of stimulating economic growth by encouraging employers to hire people, the Prime Minister has said the Government will consult on the introduction of “protected conversations”. These will apparently enable employers and employees to speak freely to one another about subjects such as performance, and will not be admissible in any subsequent tribunal proceedings.

Had Mr Cameron taken our advice on this, we would have told him such a change is really not needed.

The Prime Minister outlined his proposal in a speech to business leaders in London, linking it to other proposed employment measures aimed at promoting expansion and recruitment. These were increasing the qualifying period for unfair dismissal claims from one year to two and introducing fees for people bringing cases to employment tribunals, in an effort to restrict these to disputes where “the employer has a genuine case to answer.”

All good managers are already well able to have frank conversations about performance with employees and it does not matter to them whether those are subsequently referred to in tribunal proceedings. Appropriate conversations should assist the employer to defend itself, if it comes to that.

The key is to ensure that the trust and confidence which needs to exist between an employer and employee is not destroyed by things which are said or the way in which they are communicated.

Evidence of how this trust and confidence could be dissipated is highlight in a current case in which veteran City fund manager Patrick Evershed is suing former employer New Star Asset Management for constructive dismissal, alleging bullying by the organisation’s ex-chairman and chief investment officer. It is clear that certain comments made within that organisation had undermined completely these essentials of a sound working relationship.

If the Prime Minister’s idea of creating “fair, simple processes that are good for business and good for employees” means the former can effectively say what they wish under a new cloak of privilege, this is really not a good proposal at all. If it is a “protected conversation”, how is anyone going to be allowed to judge its effect?

The effect Mr Cameron believes should result, i.e. “a boss and an employee feel able to sit down together and have a frank conversation – at either’s request”, should exist in a well-run workplace already. Further legislation to allow this is not required: it would undoubtedly lead to more litigation about what is, and is not, protected.

Mr Cameron’s advocating of “protected conversations” has been interpreted as signalling he will not be implementing a more radical proposal from venture capitalist Adrian Beecroft that employers ought to be able to sack “unproductive” workers without explanation.

Liberal Democrat leader Nick Clegg, whose party had opposed the Beecroft proposal, highlighted the idea of “protected conversations”, originally suggested by his colleague and business minister Ed Davey, as an alternative way of liberalising employment laws to encourage economic activity and reduce unemployment.

If you wish to discuss the points raised in this article, or any issues around protected conversation and how management can tackle them effectively, please contact Philip Paget, Partner and Head of Employment on 0113 227 0212 or e-mail: philip.paget@gordonsllp.com

Philip PagetPartner and Head of Employment Law at Yorkshire law firm Gordons

Acknowledgements

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