Just 15 years ago, former Simmons & Simmons partner Janet Gaymer founded the Employment Lawyers Association, having already set up Simmons’ own employment department and begun the long process of raising the profile of her chosen practice area. Roll forward to 2007, and the standing of the employment teams in the largest City law firms is far higher. Not only is it a popular area of law to qualify into, but it is proving more lucrative as bluechips demand frequent and complex employment law advice across the globe. In short, employment law has soared in status as the financial implications of ‘getting it wrong’ have become clear.
Clifford Chance (CC) head of employment Chris Goodwill comments: “It has definitely become more fashionable to be an employment lawyer — you have to have everything. You have to be a counsellor, but also have a good business head and an understanding of the relationships between employer and employee.”
There is no doubting that employment lawyers are a passionate bunch and they have reason to be happy in the current climate, for business is booming. A raft of legislation over recent years — including the age discrimination regulations and the contentious issue of statutory grievance and disciplinary procedures — means that the expertise of good employment lawyers is in high demand. And with many bluechip companies now electing human resources (HR) directors to sit on their executive boards, they are realising the added value of their employees.
“There are so many different areas of law within employment and there is no let-up — lots of new cases are appearing and it is good fun,” adds Pinsents’ Goodwyn.
From a recruitment perspective, being a skilled employment lawyer puts you in demand, as Laurence Simons’ Amy Neo explains: “The market is buoyant at the moment.” She says employment law has become an attractive prospect for newly-qualified lawyers, with it currently being the most popular area of law.
Martin Edwards, an employment partner at north-west firm Mace & Jones, says that keeping up with the development of new case law is a huge challenge. “I am writing an equal opportunities handbook at the moment and there is barely a page I have not rewritten since I originally wrote it in 2004.”
One of the biggest pieces of case law of recent years, and something that is exercising the minds of employment lawyers, is the equal pay claim launched by 1,600 female health workers against two Cumbrian hospitals. In 2005, the claimants won the biggest-ever equal pay deal, a total of £300m, after rejecting an initial offer of £1.5m. The victory was unprecedented and according to Judith Watson, national head of Cobbetts’ employment law and pensions team, there is a lot of similar work to be had in the public sector advising on equal pay claims.
“We are at various stages of work with a number of local authority and NHS clients dealing with multimillion-pound claims for equal pay,” she says. A lot of the work Cobbetts is now doing includes advising companies on the strategies they should adopt to mitigate against multimillion-pound equal pay claims. “We are advising on strategies to deal with specialist claimant firms and risk management and on terms of settlement where appropriate,” she says. She says Cobbetts has a group of local authority clients on their books who they are helping to develop “cost-effective ways of managing multi-claimant actions”. The firm has developed both in-house and external resources and precedents and protocols that clients can use to help ward off the potentially damaging financial effects that equal pay claims could bring.
Employment lawyers are waiting for a second wave of litigation from the public sector on pay discrimination. This is expected to reopen the deals that are currently being done that in some cases are still in breach of the pay discrimination legislation.
Jenny Eady QC, an employment barrister at Old Square Chambers, says that the question of equal pay claims is now a “really big thing” that she expects to carry on for some time. Mace & Jones’ Edwards agrees, saying that his firm is expecting a “dramatic increase in NHS and local authority cases” after the “explosion of cases in the last 12 months”.
Another issue creeping back into the arena of employment law is the rise of collectivism — the increasing representation of and establishment by employees of trade union branches. This type of collective action by employees all but petered out in the 1980s after Margaret Thatcher introduced sweeping reforms to cut trade union power. “There is an increasing rise in industrial action and unionism and there is much more strategic thinking going on in terms of the rights of workers in collectives,” Goodwyn says. Some employment lawyers have not been faced with these types of cases from both the public and private sector for the last 15-20 years, meaning even the most experienced employment practitioners are having to re-learn case law on the issue; many advisers report clients asking for advice when employees threaten strike action.
James Cox, an employment partner at the
Tribunal hearings increase
Employment lawyers are in no doubt that one of the biggest issues in recent years has been the Government’s statutory grievance and dismissal procedures. Introduced in October 2004 to resolve workplace disputes internally, the statutory grievance procedures had the reverse effect, leading to a steep increase in tribunal-related work for employment lawyers. Simmons’ head of international employment practice William Dawson is candid about the effect of the new procedures. “It has created a lot of work, but as a process it has been difficult for businesses to cope with and it does not help anybody.”
The statistics would certainly seem to back this up. A survey published last year by accountants Baker Tilly, on behalf of the Employment Lawyers Association, showed that 60% of respondents from a pool of 4,000 employment law solicitors and barristers believed that the statutory grievance procedures made ‘no difference’ to employees who brought claims. Among those who advise employers, 99% felt that the procedures were more costly to clients in terms of time and money. Overall, almost three-quarters of respondents believed the statutory grievance procedure had not made any difference to the number of claims resolved early. Sue Jenkins, an employment partner at national firm Beachcroft, puts it bluntly: “It has been a fiasco — it was well-meant, but in practice it has served to escalate the formality of the process and it gives employees a lot of leverage. It is a nuisance and a real pain for employers.”
The Government seems to have listened to complaints and is currently in a three-month consultation period about replacing the procedures following the Gibbons review published in March. Michael Gibbons — a leading mediator for family disputes — was commissioned by the Government to look again at the statutory grievance procedures and concluded that alternative dispute resolution (ADR) should be used to reduce the escalating number of cases going to tribunal.
His recommendations include suggestions that solutions such as mediation be sought in the first instance to reduce the escalating number of cases going to tribunal. He also said that straightforward claims should be fast-tracked and that advice lines that promote ADR practices better resourced. Despite the procedures having generated significant fees for employment practices, the advisers will be glad to see the back of them. “It was well-intended but badly implemented and we have had to pick up the pieces,” says Mace & Jones’ Edwards.
The generation game
Age discrimination is another potential growth area for employment lawyers, although most advisers agree that successful cases have yet to take off. That said, the age discrimination legislation has the potential to be one of the biggest things to hit employment law in years. Regulations introducing a general prohibition on age discrimination in employment and vocational training come into force on 1 October, 2006. The rules mean that in some circumstances, discrimination on the grounds of age will still be permitted, but it will need to be objectively justified — and this requires hard, documented evidence that the discrimination was the least onerous way of achieving a legitimate business aim.
So far, age discrimination work has been trickling in but it does not match the volume of pre-launch hype about its potential to disrupt employers. “We are currently advising clients that they need to look at their pension schemes, benefit structures, and age-related service benefits; in six to 12 months’ time we will be a lot wiser once we have seen how tribunals grapple with different age discrimination cases,” says CC’s Goodwill. There is also little evidence to date of how claimant lawyers may use the regulations to their clients’ advantage — another reason advisers for large employers are unable to gauge the law’s true impact at present.
Bettina Bender, an employment partner at boutique employment and partnership specialists CM Murray, predicts work on age discrimination legislation will open up in the next 12 months. “Age discrimination provides the white middle-aged male with an opportunity to try to bring his case within the discrimination arena where, unlike unfair dismissal claims, compensation is not capped.”
One thing most employment specialists are certain of is that discrimination work of all kinds will continue to expand over the coming years. Manches employment partner Sarah Johnson suggests that discrimination on the grounds of class could be an area for future work. “The question is how do you measure class? It could be much more difficult than age — it is very subjective,” she adds. Obesity and ‘fattism’ has also been touted as the next subject of discrimination claims.
The market for employment law has certainly increased dramatically over the last five years, with companies warming to the idea that the value of their business is as much about their employees as their turnover. In response, many
In the magic circle, CC’s employment practice has become increasingly important as big-ticket clients often now require employment advice on all deals — although it still brings in a relatively small percentage of the firm’s turnover. The fees generated at employment practices at national firms such as Eversheds is more significant. Martin Warren, head of the firm’s HR group, says that the practice will bring in about an eighth of the firm’s annual turnover, which is just below £400m. Cobbett’s Watson says that the employment practice brings in around 10% of the firm’s turnover and adds that the number has grown “steadily” over the last five years.
And it is not just the