Date: 07/08/12 Duration: 00:20:38

In this podcast Norman Lamb MP, Minister for Employment Relations, Consumer and Postal Affairs, Stephen Levenson, a senior lawyer at RadcliffesLeBrasseur, David Liddle, Director of the TCM Group and Leatham Green, Assistant Director of Personnel and Training, East Sussex County Council, discuss the controversial Beecroft Report which proposed a radical overhaul of employment law including measures intended to shift the balance of power governing the relationship between employers and their employees.

View the full podcast transcript

Philippa Lamb: Complaints about employment law have been growing louder in some business circles lately. They argue that legislation now leans so far in favour of employees that it’s stifling growth and hindering the recovery. The government has taken heed, the controversial Beecroft Report commissioned by David Cameron proposed a radical overhaul of employment law and included a raft of measures intended to shift the balance of power governing the relationship between employers and their employees. Speaking at a recent CIPD conference Employment Relations Minister, Norman Lamb, had this to say about it.

Norman Lamb: The government has an important role to play in ensuring that the UK’s Employment Law regime operates as flexibly and as effectively as possible, that's why we're introducing a series of reforms which safeguard workers’ rights while streamlining the system to reduce the sometimes onerous and unnecessary demands made on employers. Flexible labour markets are a critical component of a successful economy. It’s essential that they function in a way that gives employers the confidence to create new jobs so people out of work can get that vital foot in the door. However, smaller businesses in particular have told us that the fear of ending up in an employment tribunal is a real disincentive to hiring new staff. The decision to expand is one of the most important steps a growing business ever takes so if we're serious about job creation we have to strike the right balance between, on the one hand, security for the worker and on the other hand flexibility for the employer.

PL: Speaking about the Employment Law review, Business Secretary, Vince Cable, stressed that the point was to ensure that we have a system that meets the needs of an economy which is striving to recover and grow. As such possible changes include halving the minimum period for collective redundancies from the current 90 days to 45 and doubling the time a staff member must have been in post before they can claim unfair dismissal from one year to two. Changes are also likely in the areas of tribunals and dispute resolution. Here’s Norman Lamb again.

NL: We believe there is substantial scope for improving the current, unwieldy, expensive and delay-ridden system of employment tribunals. The average claim now takes 24 weeks. So we're introducing a range of measures to streamline and speed up the tribunal process. Judges can now sit alone in hearings for unfair dismissal cases rather than having to convene a tripartite panel. Witness statements no longer have to be read in full at a hearing. Judges can award costs of up to £20,000 to either party and judges can order the claimant to pay a deposit of up to £1,000 where they consider that claims have little chance of success. In addition the government has consulted on introducing fees for employment tribunals. These tribunal reforms will mean that employers can once again have the confidence to hire the staff they need to grow and to thrive.

PL: Stephen Levinson is an employment lawyer at RadcliffesLeBrasseur, he's spent much of his working life acting for senior executives resolving disputes at not only tribunal but supreme court level and I asked him for his take on the Beecroft Report.

Stephen Levinson: I think one has to make a distinction between changes that are being made for the sake of perception and changes that will have a real effect. I think a number of the changes that the government are making are because they want to convince employers that they're doing something important about employment law, for example, the two year change to bring a claim for unfair dismissal has no real practical effect, a couple of thousand claims probably and government knows that perfectly well because it’s given those numbers.

PL: But it looks like a step in the right direction.

SL: It looks like they’re doing what a lot of the business community wants. My concern about it is that the government lacks a vision of where they want to end up.

PL: As well as streamlining the tribunal process the government also wants to reduce the overall number of disputes that reach tribunals, over 200,000 last year and that was almost a 50% rise on the year from 2008 to 09. So how do they hope to do this? Well a number of ideas have been suggested including introducing fees for claimants and insisting all claimants go via the conciliation service ACAS first. But perhaps the most interesting is to encourage altogether different methods of finding a solution, most notably mediation. Here’s Norman Lamb again.

NL: We are encouraging greater use of alternative ways of resolving disputes before they get to the tribunal stage. We're setting up two mediation projects to explore the potential benefits of a network-based approach, particularly appropriate for small businesses where businesses can group together to make that sort of approach work.

PL: So what does mediation involve? David Liddle is the founder of the TCM Group, a mediation company set up back in 2001.

David Liddle: People sometimes talk to me about mediation and the way that mediators facilitate conversation and dialogue as being New Age, progressive, a very liberal approach, and as I remind them it’s the reliance on the processes, grievance and the statutory framework such as grievance and disciplinary processes that are actually really very new and very modern instruments of dispute resolution. Having a conversation and discussion with each other we've been doing since we lived in caves and all the mediator does and the mediation process allows for is a very human interaction between two people who experience a very natural phenomenon which is not seeing eye to eye, a quarrel, a disagreement, a falling out, and so that's what mediation offers, a very human way of resolving our disputes without taking them in front of a third party arbiter.

PL: Mediation has been gaining traction in the UK in the last few years, not least because the alternatives are so expensive. There's the cost of legal bills and the possibility of having to pay out a financial award as well as the cost of recruitment if employees leave. On top of all this there's the financial impact of a team with low morale as a tribunal looms over it. But whilst conflict may be inevitable David Liddle argues it may not always be such a bad thing.

DL: I work with the UA and I work with global blue chips and a whole range of other organisations and when I'm talking to the board I say I'm not a mediator I'm a PR agent for conflict. Conflict is healthy, conflict is positive, it can drive real change in organisations and so by seeing disputes and dispute resolution as something which is, if you like, a necessary evil in the organisation, and our grievance processes and move to litigation, mitigate the risk of harm or damage to the employer, I say to those organisations you’re getting it all wrong, conflicts and disputes are something that we should celebrate, that we should give people the opportunity to come together at those points of conflict because conflict, when it’s handled well and managed effectively, promotes creativity. It brings people together. It promotes cohesion. Healthy discord within an office team actually adds value to that organisation, it adds competitive advantage to that organisation.

PL: And you get engagement benefits presumably as well?

DL: Absolutely. So it’s not about seeing eye to eye. So it’s about how organisations recognise that conflicts will exist and then put the steps in place to manage them when they do. And so what I say to those organisations is liberate yourselves from those learnt behaviours, look at conflict through another end of the telescope, think about conflict and change as being two sides of the same coin so when conflict is handled effectively and managed well by leaders and HR professionals and others, with the help of mediation processes, it can actually deliver long term sustainable and highly effective change. I think when organisations take that approach and view conflict in that way they realise incredible benefits and incredible successes.

PL: Of course work-related disputes come in all shapes and sizes so is mediation really suitable for all of them? David Liddle.

DL: My personal view is that mediation is suitable in all cases. The majority of people for every one reason I could give them why they should sit around the table and have an adult exchange with the other party they can give me one 1,624 reasons why they should never, ever be put in a room with that other person. So of course a large part of setting the mediation scheme up is about building mediation as a credible mainstream activity and recognising that a lot of people will feel uncomfortable with it, very nervous about it, unsure about what will happen in the mediation process, so a lot of work is done in organisations that we work with to demystify mediation, to make it normal, just a normal everyday activity of that organisation. It takes time but the benefits are so profound for those organisations who are willing to take the first steps on that journey.

PL: And is there hard evidence that introducing systems like that and making sure you use them does bring down the number of tribunal cases?

DL: Absolutely. I mean one London borough that we were working with reported an 80% reduction in the number of employment tribunals that they were defending over a three year period having introduced mediation.

PL: And the credibility of mediation is certainly growing. East Sussex County Council introduced it in 2008 in the hope it would cut the time, stress and money that disputes were costing them. The workforce is 15,000 strong and although the number of disputes wasn't large the operational and emotional impact of dealing with them was still significant. Leatham Green is Assistant Director of Personnel and Training at the Council.

Leatham Green: We decided to introduce mediation in East Sussex because the traditional route of addressing workplace conflict, such as grievance or dignity at work investigations processes really hadn’t been producing the results that we wanted to see for people, speedy resolution, getting people to be able to work together and also the impact in terms of cost where we actually ended up in a tribunal.

PL: Were you seeing a lot of cases go to tribunal?

LG: At that point in time we would have, it was something like 12, but the big...

PL: Annually?

LG: …annually, yeah and of course, that doesn’t mean to say we hadn’t resolved cases just before they'd got to a tribunal. We didn’t lose many cases at tribunal but when we did lose it was usually due to a procedural failing rather than the way we had conducted ourselves with the employee. But we did lose a case which cost us a lot of money so from my point of view being able to go back to the organisation to say if we're going to prevent this from happening again we've got to look at alternative ways of tackling dispute earlier.

PL: A formal dispute took up an average of 32 days of an HR advisor’s time and a similar amount again for line managers, legal advisors and trade union representatives. These lengthy disputes also had measurable effects on sickness absence and staff turnover. The mediation process the Council now uses is dramatically swifter.

LG: In terms of timeline when we get the commission we will always try, or attempt to have the day of mediation within two weeks and all cases we will attempt to mediate within the day and have an agreement reached where parties are signing at settlement at the end of the day. Ideally, and this is a very symbolic gesture, shaking hands with the individual concerned. I don’t always get an agreement to shake someone's hand but I'm looking you in the eye and saying, “I agree to put differences aside and from today move forward with a fresh approach to our working relationship.”

PL: So at what stage should a dispute trigger the mediation process?

DL: As early as possible is always best. I think nipping issues in the bud is the common parlance and I think that's a really important role that HR professionals and business leaders and managers can play. But of course mediation can actually work really well at the end of the conflict cycle. I’ve been working with parties in mediations where they’ve stared into the precipice, they don’t like what they see, they want to retain their employment in the organisation, the employer still values them, they realise that this is heading for a severe breakdown in the relationship, a termination of relationship and mediation can work equally well there in a restorative function.

PL: So it’s finding a way back from the edge?

DL: It’s finding the way back from the edge absolutely. And parties say to me they want to find the way back from the edge. People don’t codify their disputes in financial terms the way that they look at their dispute is they want some explanation, some understanding, a chance to have their voice heard, to have their views considered.

PL: So generally it’s not purely about the money?

DL: It’s not about the money, people are told it’s about the money by third parties involved in the dispute but whenever I talk to parties in a dispute it starts off about money because that's how they believe their dispute should be measured and codified but actually when I dig beneath that and look at the interests and the needs that are driving the parties, not just their adopted positions, what I hear them saying is they want an apology, some explanation, they want to get back to work, they want things to be like they were before this all happened.

PL: Clearly mediation needs to sit alongside existing grievance procedures and according to David the best outcomes are achieved by knitting it into the existing system.

DL: Training managers and leaders to handle conflicts in a more constructive and more effective way, building in peacemaking and peacekeeping skills into the HR function, so HR becoming an enabler of dispute resolution rather than as an observer or facilitating an arbitration process. We look at building up a team of company mediators who can fight professional mediation services and act as a small team of mediators who are mobilised very quickly. I think of them often as the unsung heroes of the modern workforce and they’re helping to keep peace and harmony and build strong relationships.

PL: It sounds like a little SWAT team.

DL: Exactly yeah it is like a little UN peacekeeping force in the workplace and it happens fast and it’s so effective.

PL: And when you contrast that with an average of 24 weeks for tribunals to play out it’s a no brainer isn’t it?

DL: I don't know how people get out of bed in the morning.

PL: In all but one of the mediation cases at East Sussex County Council resolution has been achieved via mediation but it hasn’t all been plain sailing. Here’s Leatham Green again.

LG: Well I wouldn’t like to give the impression that all is a bed of roses in East Sussex and we just kind of get along very nicely with each other, it’s not like that at all and of course we've still got the majority of cases where individuals choose to go down a formal route rather than use mediation. The key issue in terms of resistance is change itself and its status quo is much safer even though we have the mantra of we're about change and business change, reengineering, if I can keep things the way they are people generally will seek ways of doing that. So it is about making sure that you've got clear leadership in terms of where we're trying to get to, what difference mediation’s going to make.

PL: It’s about stakeholders too isn’t it because you deal with a lot of unions don’t you?

LG: We deal with unions and of course their engagement in our particular approach which I think is slightly unique was the fact that they were part of that early informal conversation that this is not working is it? What can we do, that we entered into.

PL: So you got buy in from the union senior leadership what about lower down at ground though?

LG: Well we didn’t, just going back on that point, we didn’t get buy in from every leader, we've got many unions that we work with and it went from high end positive engagement to low end, you know, “I don’t want to do this.” And generally it was school-based unions, teaching unions who were against the idea. That is slowly changing and it’s not every union but at a local level it was a very different story. So local stewards are still very sceptical, some individuals are sceptical even though we've got statistics and figures and feedback from their colleagues to say this is a much better, much more human way of addressing conflict.

PL: Nonetheless Sussex County Council is still struggling with the brand perception of mediation.

LG: Mediation can sound like a softer option. It’s probably, for those people who’ve participated in it, the most difficult experience of their lives in terms of releasing the tension, the anger, the animosity, the frustration. It’s usually the manager having to listen to this in terms of what an individual thinks about them, very difficult and very challenging and individuals at the end of that will never put, “This was a soft option,” but it’s just in terms of perception of business.

PL: But according to Leatham the effort is undoubtedly worth it.

LG: The weight which lifts from a workplace when that conflict disappears is almost tangible, it’s amazing the difference that it has on the whole team because it’s not just two individuals who are affected, you know, the ripples go out.

PL: So the real wins sound as if they’re around getting rid of that toxic atmosphere that spreads from disputes which diminishes productivity, engagement right across a whole load of people who aren’t actually involved in the dispute is that what you’re saying?

LG: Yeah and of course bad news and toxic infection spreads much quicker than good news and therefore it’s taken us time and effort to actually market the impact that mediation’s had.

PL: The best marketing tool for mediation at Sussex County Council has been those participants who have had a good experience with it.

LG: We get willing participants who say, “Do you know this has been such a brilliant experience I want to tell others about it,” and now I've never heard that from anyone participating in grievance or an employment tribunal. “I've had such a great experience I want to tell people how amazing the grievance procedure was in resolving my dispute.” You know others may have done but for me it’s not something that I've ever experienced in 25 years and how do you quantify that in terms of price?

PL: As to whether the government’s proposals will go far enough in their support of mediation David Liddle isn’t convinced.

DL: HR directors and HR professionals are penalised at employment tribunal for failing to follow a grievance process which is still an inherently adversarial process which drives a wedge between parties and until there's a direct split and a breakaway between those different functions, organisations are still being encouraged to employ local processes and local practices which in my view are no longer fit for purpose. So I would urge the government to rethink the messages for HR directors, for the ACAS council and for the Department for Business to sit down and really provide clear and unequivocal guidance for employers about how to introduce mediation into their organisations, to be clear to organisations that grievance processes can and should incorporate an opportunity for mediation, not just at the informal stage but throughout the grievance process and decouple the relationship between grievance and employment tribunal and I think until that happens we’ll be tinkering around the edges.

PL: That's it for this month. Thanks for listening.

On October 1st, the largest UK employers will begin the process of automatically enrolling employees into their pension schemes so for next month’s podcast we're going to be revisiting auto enrolment. It’s a big subject with implications for employers of every size from giants to minnows. So join me then.

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