Cushioning a fall from grace

Proposed legislation could lead to more claims of unfair dismissal and higher compensation awards. Anat Arkin reports

New laws designed to strengthen employees' rights could lead to a big increase in the number of teachers bringing claims for unfair dismissal.

The Government's White Paper Fairness at Work proposes to cut the qualifying period for protection against unfair dismissal from two years to one. This will increase the number of workers entitled to bring claims. In schools, it is also likely to mean that one-year, fixed-term contracts are less widely used in future.

Maureen Cooper, a director of EPM, the privatised education personnel management department of Cambridgeshire County Council, says schools will need to review their reasons for not renewing one-year contracts.

Pointing out that in law the non-renewal of a fixed-term contract is nearly always a dismissal, she says: "Where schools are tempted to put newly qualified teachers on one-year fixed term contracts just to see how good they are, they could potentially be caught out because if the teacher isn't up to scratch or if you've got a rogue school that wants to get rid of them just to get another cheap newly qualified teacher, that will be a dismissal, and the next question will be: is it a fair dismissal?" If it turns out to be unfair - perhaps because an under-performing teacher has not been given adequate warnings or support - the sacking could prove expensive, because the White Paper also proposes to scrap the upper limit for compensation awards for unfair dismissal. That limit stands at Pounds 12,000.

Should this proposal become law, industrial tribunals are likely to start making much larger awards, just as they did when the upper limit on compensation for sex and discrimination cases was lifted a few years ago. So, for example, a fifty-something headteacher who had been earning Pounds 35,000 a year and has little chance of finding another job, could win damages in the order of Pounds 100,000 for loss of future earnings and pension rights.

Since the White Paper came out last May there has been speculation that Peter Mandelson, the Secretary of State for Trade and Industry, plans to raise the compensation cap to Pounds 40,000 or Pounds 50,000 instead of abolishing it. His department emphasises that no final decisions have yet been made on a forthcoming employment rights Bill.

Even a Pounds 40,000 limit would probably lead to significantly higher awards. They, in turn, could encourage more people to go to law, though opinions are divided on this point. The National Union of Teachers solicitor, Graham Clayton, says the teacher unions are already so active on behalf of sacked members that he does not anticipate any increase in the number of teachers bringing claims. But employment lawyers are expecting to pick up a lot of new business from schools.

Gary Freer, head of employment law at Barlow Lyde Gilbert, a solicitors, says that under the present system most unfair dismissal cases are settled for a few hundred pounds before they reach an industrial tribunal. He predicts that once word gets around that tribunals are making large awards, many more people will be prepared to take their claims to a hearing. A disproportionate number of these could be teachers.

"My perception is that schools are often quite bad at handling disciplinary issues," he says. "I think that's partly because the disciplinary issues themselves are often rather difficult and sensitive I and partly because sometimes emotions get the better of people and things are not dealt with in quite the clinical way they would be elsewhere."

The prospect of heavy damages could encourage a more "clinical" approach to dismissals. Jenni Watson, national secretary of Redress, the bullied teachers' organisation, believes it may change the attitude of headteachers and governors who think that it is worth paying up Pounds 12,000 to get rid of someone whose face does not fit.

But Simon Steen, who heads the employment law department at Gosschalks, a solicitors in Hull, and regularly acts for Redress members, is less certain that higher awards will affect the way schools make dismissal decisions. "The closer you align responsibility with accountability, the better the quality of the decision-making process," he says.

"But at the moment there's an odd situation where most schools are responsible for dismissing individuals and the local authority picks up the tab. It is authority without responsibility."

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