Employment Law Reforms

The coalition Government has been looking at ways to reduce what it sees as bureaucratic hurdles that are holding back the UK’s economic growth. The perceived red tape associated with aspects of employment law has been one of the areas under scrutiny since 2010.

Consultations on various aspects of the employer-employee relationship have been published that have informed the content of The Enterprise and Regulatory Reform Bill 2012-2013, which is now making its way through the parliamentary legislative-making process. The coalition government sees these potential reforms as ways to improve employer confidence that will, amongst other things, stimulate recruitment.

Numerous consultations have been undertaken (and in several cases are on-going) and on 14 September, 2012, Vince Cable the Business Secretary, further elaborated on the employment law aspects of the Bill that are designed to give firms more flexibility and confidence in managing their workforce. The measures, according to the Department for Business Innovation and Skills (BIS) respond to business concerns . . . “that we [the coalition government] need to do more to help them tackle issues at the end of the employment life cycle and aim to:
• Create certainty about employers’ liabilities
• Provide clarity on dismissal and tribunal processes
• Give business confidence to use settlement agreements to end employment relationships where this is necessary thereby avoiding the tribunal process completely.”

The announcement included:

  • Following on from Mr Justice Underhill’s review, a consultation starting on 14 September, about Employment Tribunals and proposals that will enable judges more easily to dismiss weak cases and thus reduce the number of preliminary hearings.
  • A consultation on the subject of Settlement Agreements (the ‘revamped’ compromise agreement) that describes the practical issues (including a template letter and guidance on how employers and employees would reach agreement). Acas has also agreed to provide a new code of practice for settlement agreements. The objective is to allow employers to offer these agreements before a dispute arises and be protected from having the offer used against them in an unfair dismissal case.
  • It also confirmed that on the evidence received, the proposal for compensated no-fault dismissal will not be taken forward.
  • Amongst other things, the coalition government has asked Acas to consider how procedures for poor performance and misconduct might be better distinguished from each other thus improving the effectiveness of their Code of Practice on Disciplinary and Grievance.
  • The coalition government’s interim response to evidence received regarding the effectiveness of TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) will produce a period of policy design on matters such as retaining or repealing the service provision change element or whether employee liability information should be provided earlier to the transferee.
  • There is a provision in the Bill to cap unfair dismissal compensation between the lower of £25,882 (annual median earnings) and £77,646 (three times annual median earnings) on the one hand or twelve months’ pay as received by the claimant. The coalition government is seeking views both on the amount of the cap and the approach suggested.

Clearly there are still some meaty issues to be settled before the Bill becomes law!

This entry was posted in Blog. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *