11-01-2012

Government announces proposals for major employment law reform

The Government has announced radical proposals for reform of employment law, designed to safeguard workers’ rights while reducing unnecessary demands on business.

There are few fixed introduction dates but, in the short-term, the proposals include:

  • A review of the employment tribunal rules, to make them simpler and clearer.
  • Allowing employment judges to hear unfair dismissal cases on their own.
  • Power to require the parties to pay the costs (eg for loss of wages) of unwilling (subpoenaed) witnesses. Whichever party loses reimburses the other.
  • Financial penalties on employers who commit ‘aggravated’ breaches of employment laws, in addition to any compensation they must pay an employee.
  • Doubling of the deposits payable by a claimant where a Judge considers a claim has little chance of success.

The Government has already asked for evidence on the following by 31 January 2012:

  • Reduction of the consultation periods where an employer is proposing collective redundancies, ie to dismiss 100 or more workers.
  • Simplification of the TUPE rules that protect employees’ rights when the undertaking they work for is transferred to a new owner.

And it says it will call for evidence soon on the following proposals:

  • Firms with 10 or fewer employees to be able to dismiss workers for no reason, subject to paying compensation (costs might be similar to statutory redundancy).
  • Simpler and faster dismissal procedures.
  • Introduction of fees for starting tribunal proceedings, and fees at various stages during those proceedings, proposed for April 2013.

Two proposals that could very significantly affect employer/employee relations are:

  • Allowing 'protected conversations', in which employers can discuss issues such as capability with employees without worrying about potential tribunal claims based on what they say.
  • Requiring employees to have worked for two years (currently one) before they may bring unfair dismissal claims (this proposal has a target date of April 2012 attached).

Other general proposals include:

  • Requirement to submit grievances to Acas for conciliation before being allowed to bring a tribunal claim.
  • Consultation on establishing regional mediation networks, with collaboration and knowledge-sharing between larger businesses and SMEs.
  • Establishing a ‘Rapid Resolution’ scheme as an alternative to tribunals.
  • Extension of flexible working rules.
  • Maternity and paternity leave to be merged to become shared parental leave.
  • Consolidation of the various regulations on the national minimum wage.
  • Reform of the law regarding compromise agreements to allow equality claims, for instance.
  • Review of whistleblowing laws.

Recommendation

Employers should consider the impact of the proposed changes on their businesses – their policies, procedures and profitability – in the short and longer-term. This could include:

  • Planning for the extended qualifying period for unfair dismissal, including the danger that employees with less than one year’s service may try to bring claims under some other charge, such as discrimination.
  • Considering whether you will wish to use voluntary alternatives to the tribunal system, such as conciliation, mediation networks or the Rapid Resolution scheme.

Altering systems to budget for possible additional penalties, witness expenses, etc if a claim is made.