Britain’s IR thought-starter

Australian businesses have always been good in taking ideas from overseas, so it always pays to examine the latest business trends from abroad.

As Australian business battles what it sees as the resurgence of the union movement, in Britain the Conservative Government is taking industrial relations in a very different direction.

Prime Minister David Cameron has been leading a taskforce into ways to loosen Britain’s labour laws in favour of employees and has recently come back to the electorate with some concrete ideas.

While he’s rejected a proposal to allow businesses to terminate employees at any time without fear of legal action (affectionately known as the “fire at will” proposal) he has announced two interesting proposals.

The first is an extension of unfair dismissal protections from one to two years; that is, an employer can terminate an underperforming worker any time in their first two years on the job without fear of an unfair dismissal claim.

The second is much more interesting. Cameron and his taskforce are pushing to introduce something called a “protected conversation” where employees and employers can have a frank performance discussion safe in the knowledge that nothing that is said in that conversation can be used as evidence in a later legal claim.

“We want businesses to create jobs,” Cameron said last week.

“But if employers are so concerned about the prospect of being taken to tribunal that they don’t feel they can have frank conversations with their employee, many companies just won’t feel able to create those jobs in the first place.”

Cameron has been at pains to emphasise that employees are free to request a conversation with their employer if they believe the boss’s performance isn’t up to scratch, although most commentators have been quick to suggest (and they are right) that this idea is slightly less than realistic.

As you would expect, there has been plenty of argy-bargy about the “protected conversation” idea.

Unions hate it and have warned it will be used to intimate workers. The Government has been forced to backtrack slightly, confirming that the protections would not extend to discriminatory behaviour by a boss.

For all that, the idea has some interest. I think most employers and indeed most employees would welcome the prospect of more open, frank and transparent conversations in the workplace. All parties in a business like to know where they stand and the “protected conversation” model could make it easier for these conversations to take place.

But do we really need to go down this path? As a number of British IR lawyers have pointed out, there is no problem holding frank and open conversations about performance right now – employers just cannot act in a way that is unreasonable, harsh or discriminatory. And surely frank performance conversations can be held without straying into that territory.

But the real reason that the proposal might not work as well as the British Government hopes it would was pointed out by Financial Times columnist Lucy Kellerman last week.

It isn’t the fear of legal action that stops employers from having hard conversations with their workers.

“There are lots of reasons why plain talk at work so seldom happens – and fear of the law and recriminations come low down the list,” she wrote last week.

“We aren’t frank mainly because it’s so much easier not to be. Telling someone that they are useless is a miserable thing to do because they will get upset, and you will squirm and feel really beastly.”

Frank and potentially difficult conversations do need to happen in a workplace. But employers don’t need new laws to allow them to happen – they need a bit of backbone and plenty of honesty.