According to the Guardian, the government is to extend its review of employment law to tighten up discrimination compensation and dilute rules protecting employees' rights when a business is transferred from one owner to another.
Lib Dem minister Ed Davey will announce the new areas up for review at the Institute for Economic Affairs today as the government attempts to clear away restrictions for employees. It will consider moving on discrimination compensation and Transfer of Undertakings (Protection of Employment) Regulations (TUPE).
From my perspective, I would broadly welcome steps to limit discrimination awards, but these claims are very much the exception. In any event, the ability to change the law is limited by the European Court of Justice.
The vast majority of employment claims do not reach that high a level.
If the government wishes to get both employers and employees motivated about settling claims sooner, it may wish to ask both parties to start objectively considering the damage done to both of them by a dispute continuing.
By way of example, why not focus less on changing the rules but educating the parties of the damage of litigation.
These costs do not just include awards, legal costs, but also lost time, lost business and damage to reputation?
In a related matter consider the damage done to BP by the oil spill in the United States last year. http://www.guardian.co.uk/business/2010/nov/02/bp-oil-spill-costs-40-billion-dollars
Notice how the damage done to the organisation is like a ripple pond. It extends far and wide. The "hidden" cost of reputation will usually outweigh the production losses which an organisation experiences from a dispute.
In an employment dispute it is not just damage for press coverage, but rather what employees say about the organisation to other people.
Once parties start working on the damage done to them by disputes, they will become more motivated to settle.
From the employee perspective, in my experience many who obtain awards achieve victories which are not necessarily cost effective or personally satisfying. Therefore they can be motivated to settle as well.
Justin Patten, Employment Solicitor
P.S Since writing this post, Gower Publishing whom I have written for, inform me that companies generally suffer almost ten times the financial loss from damaged reputations than from whatever fines may be imposed. According to Ernst & Young, the investment community believes up to 50 per cent of a company's value is intangible - based mostly on corporate reputation. So recognizing potential threats, or anticipating risks, emerges as a critical organizational competence.