Employees: Unfair Dismissal Protection (Hansard, 1 July 1993)

§ The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)
My Lords, the Government believe that the current two-year qualifying period for the generality of unfair dismissal cases strikes the right balance between the interests of employers and employees. However, the Trade Union Reform and Employment Rights Bill extends the range of unfair dismissal cases for which no qualifying period of service is required.

§ Baroness Turner of Camden
My Lords, I thank the Minister for that response. However, is he aware of the report issued recently by the National Association of Citizen Advice Bureaux which expresses deep concern about the increasingly systematic way in which some employers are exploiting the lack of protection in this area? The report states that the crudest form of this systematic exploitation is the practice of dismissing employees just before they qualify for protection against unfair dismissal and lists a whole series of cases that have been reported at CABs across the country. Can the Minister not foresee a situation in which many low paid employees have absolutely no chance of ever building up any entitlement to employment rights because every time they come up to the two-year period they are dismissed? Should not the Government make inquiries into the situation which their own legislation has created?

§ Viscount Ullswater
My Lords, it would be a short-sighted employer who dismissed satisfactory employees simply because he wanted to avoid potential unfair dismissal complaints. Such action would increase costs in terms of high turnover, recruitment, training of new staff, low morale and motivation in the workforce, all of which would be likely to contribute to low productivity.
I have seen the NACAB report, and I would point out that the new Trade Union Reform and Employment Rights Bill introduces new entitlements which I know go a long way to provide what the report asks for.

§ Lord Boyd-Carpenter
My Lords, is not part of the trouble with what the noble Baroness proposes that if 924 that were put into effect it would substantially diminish the amount of employment in the short-term category?

§ Viscount Ullswater
Yes, my Lords. My noble friend raises an extremely important point. As I said in my original Answer, we feel that the balance between employers and employees is now right and encourages as much employment as possible.

§ Lord Rochester
My Lords, does the noble Viscount agree that the practice of employers whose systematic policy is to dismiss employees just before the expiry of the two-year qualifying period is not simply short-sighted, as he said, but should be condemned?

§ Viscount Ullswater
My Lords, I believe that the reasons I have given as to why it is short-sighted are good reasons. Of course I would in no way support employers who indulge in these bad practices.

§ Lord McCarthy
My Lords, does the noble Viscount not admit that protection already exists against dismissal on grounds of sex or race below two years and that it does not have the disastrous effects which the noble Lord, Lord Boyd-Carpenter, suggested? Indeed, when we had normal, unfettered protection against dismissal under two years there were a disproportionate number of cases which were much more successful in the generality. Does he agree that all the evidence suggests that protection should cover all areas of employment?

§ Viscount Ullswater
My Lords, the noble Lord reminds the House that there is no qualifying period in the case of race or sex discrimination, or, the noble Lord did not add, of dismissal for being a trade union member, although that is also protected, as is a safety committee member on an offshore installation. As I said originally, the Bill introduces new rights of complaint in respect of any statutory right, and those are important additions. We should be content with them.

§ Lord Stallard
My Lords, will the Minister accept that this is only one of the tricks which these short-sighted employers get up to? They must have long-sighted advisers, because they take on youngsters and get rid of those young people just before they become eligible to pay their full National Insurance stamp, and they take on women for less than the stipulated number of hours so that they do not have to pay holiday pay. Does the Minister agree that they are falling back into the old pre-war tricks of utilising as many people as they can for as short a lime as possible and at as little cost to the employer as possible?

§ Viscount Ullswater
My Lords, the noble Lord has brought forward some rather anecdotal points. There may be very good business reasons for employing casual staff, for example, to give greater flexibility to deal with fluctuating workloads. Therefore, I should like to see the evidence before I comment.

§ Lord Hailsham of Saint Marylebone
My Lords. is it not obvious that irresponsible and foolish behaviour on the part of employers towards their employees gives them a bad name and therefore there will come 925 a point at which it carries its own punishment? Is it not also obvious that the constant elaboration of the machinery of government to protect otherwise fairly respectable people usually also brings its own punishment?

§ Viscount Ullswater
My Lords, I agree with the words of my noble and learned friend. I believe it right that employers should be in the best position to judge what is right for them. However, if they indulge in bad employment practices not only will they get a bad reputation but it will do their business great harm.