Employment law is a minefield for bosses and workers

Has it become too hard to fire people? That’s an uncomfortable question to ask, in a world where we regularly hear of unscrupulous employers bullying, failing to pay overtime, or throwing qualified staff overboard, as P&O Ferries did so disgracefully in 2022. The bad guys undercut good businesses, which want the UK to better enforce the laws against exploitation. But good employers who play by the rules are also increasingly worn down by the laborious process of trying to remove underperformers.

I regularly meet executives and small business owners who describe a cycle: they ask someone to improve, then see that person go off sick and bring a discrimination claim. Some have given up trying: even if that leaves an employee in place — not pulling their weight and demoralising other team members. That serves no one: least of all the person who doesn’t fit and may be happier doing something else. 

Employment law cases are messy and human. When I read recent reports about a 66-year-old man who objected to a younger worker offering him a chair, seeing it as part of a plot to oust him, I imagined it could be a genuine case of age discrimination. But it turned out that the man, a recycling plant worker who had been dismissed, had dragged his employer through a tribunal that found he had no case. He had claimed age discrimination and harassment, despite admitting he could no longer do heavy lifting because of a health condition and the seat having been offered politely. 

This would have been just another sad case with a poorly advised claimant, except for the final twist. Despite rejecting the claim, the judge ruled that to offer an older employee a chair while younger ones stand could amount to “less favourable treatment” and so breach equality legislation. This felt reminiscent of the case in which an 18-year-old who was sacked for incompetence successfully argued that she had suffered age-related harassment for being called a teenager — despite that being factually correct. 

There is now a whole industry advising companies and HR managers on the nuance of equality law and what might constitute “injury to feelings”. There is also an inbuilt incentive to claim against the long list of protected characteristics because, while the amount that can be awarded for unfair dismissal is limited, there is no cap on compensation for victimisation or discrimination against a protected characteristic. The category of “religion and belief” even includes ethical veganism since a staffer at the League Against Cruel Sports complained the charity was investing pension funds in companies conducting animal testing. Meanwhile, the minimum award for injured feelings has just gone up to £1,200 — not a bad return for what are, in some cases, minor slights that might once have been brushed off.

There are many examples of appalling exploitation and harassment — like that of the 59-year-old trainee at the Department of Work and Pensions, who rightly claimed for racial and age abuse. But it serves no one that dismissal procedures, and tribunal processes, are now so cumbersome. 

The consequences are that managers spend more and more on compliance, and are so afraid of conflict that they sometimes leave bullies in place. Small businesses that don’t have in-house lawyers or HR departments are inclined to settle weak or vexatious claims, rather than take time away from running the firm. Some bigger companies are now apparently engaged in “quiet firing” — the mirror of “quiet quitting” — freezing out staff in the hope they will decide to go. None of this is likely to improve team morale, or staff-employer relationships. 

Employment tribunals are a vital mechanism for justice. They were created to provide an effective, swift and straightforward resolution in situations fraught with resentment, misunderstanding and sometimes genuine abuse. But complexity, and the post-pandemic backlog, aren’t helping.

The coalition government tried introducing fees to reduce “vexatious” claims. While the practice did lead to a reduction in the number of cases brought, it was abandoned amid concerns about denying justice to some of the lowest paid people, who had strong claims for modest awards. A better answer might be to extend the compensation cap to all types of cases, ending any warped incentive to exaggerate. 

We are all human, prone to be difficult, resentful, sometimes lazy or even downright nasty. The law should protect workers from exploitation. But it should also be fair to good employers who care about their staff and want to manage out team members who don’t fit, who bully others or take advantage. It should take a sensible approach to good deeds, like offering a chair.

I asked an employment adviser what companies should learn from the recycling plant case. She felt that it would not be problematic to offer a seat to a disabled, pregnant or ill member of staff. But this should be done privately, to avoid making someone feel different. She also pointed out that employers can simultaneously have a duty to provide “reasonable adjustments” such as seating to someone, and yet be liable for treating them differently. This made me feel very glad I’m not a chief executive. 

All of us are vulnerable to employer whims. There are workers who need protection from faceless bosses — like the Uber algorithm that systematically underpaid its couriers. But there are other workers whose bosses are trying to do the right thing. I have a basic rule: if lawyers are making lots of money from complexity, it’s probably time to simplify.

camilla.cavendish@ft.com