GUEST COMMENT: Changes to employment law are going to make it easier for banks to get rid of you. But you may get a good severance package as a result
If you’re an under-performing employee, or an employee in dispute with your employer – be it a bank, hedge fund, boutique or brokerage firm, be warned that there’s soon likely to be a legal mechanism in place that that will allow you to be fast-tracked out of the business. However, there’s a caveat: you’ll have to agree.
This new mechanism follows Vince Cable’s recent announcement that employers will be able to engage in, “protected conversations,” with employees. The concept has been introduced into the Enterprise and Regulatory Reform Bill presently going through Parliament.
In practice, protected conversations will allow your employer to discuss giving you a settlement (ie. a severance package) without fearing that those discussions could be used as ammunition against them if you start an unfair dismissal claim at an employment tribunal. Under the present position, if your employer starts talking to you about a settlement without any prior disciplinary procedures you can use this discussion as ammunition against them and claim constructive dismissal (assuming you have the qualifying period of service) by arguing that your continuing role is untenable.
The ability of your employer to be able to have frank discussions in this way without fear of a legal backlash is great for employers, but perhaps not so great for employees. Some people might be happy to be fast tracked out the business with a lump sum payment, others will be shocked at such a direct approach that can't be used against their employer. And let’s face it, the mere fact that your employer has approached you in this makes an ongoing relationship pretty much untenable in a practical sense. It must be remembered, though, that you would have the right to reject such an approach and insist that a full and proper process be followed.
So what else is changing? It is intended that “compromise agreements” are going to be renamed “settlement agreements”. It is also proposed that before you can issue a claim in the employment tribunal, you must first lodge it with ACAS who will offer the parties the opportunity to engage in conciliation-and it is only if no agreement is reached that a certificate will be issued to allow the employee to go ahead and issue the claim in the tribunal. It is also envisaged that you will be charged a fee for issuing a tribunal claim (up to now there has been no issuing fees unlike if you were to issue a claim on the County Court, or High Court).
The biggest employment law change of all, however, came into force on 6th April 2012. This was the new rule stating that from now on you need two years’ service employment with your current employer before you can claim unfair dismissal. It used to be 1 year.
The new time limit only applies to those people have commenced employment after 6th April, so if you were employed before this time your main employment rights still kick in within 1 year only.
The new time period (or indeed any time period) will not apply where your claim is based on a limited number of exceptions such as discrimination.
With all the above changes, there is clearly an agenda from the coalition government to limit the ability of employees to make a claim. Yes, of course there are those employees that have abused the system and managed to get their employer bogged down in proceedings where legal costs can generally not be recovered. But for those diligent individuals who may, say, fall foul of a new line manager due to a personality clash or has been unfairly selected for redundancy, it does seem harsh as employment law rights are slowly stripped away.
If you are faced with such a situation, however, it is usually better to negotiate a settlement with your employer if you can. In banking circles the termination package may be very nice indeed. And in that sense, nothing has changed.
Philip Landau is an employment lawyer with Landau Zeffertt Weir Solicitors and offers efinancial careers users a free consultation on 020 7357 9494 or pl@lzwlaw.co.uk
