Reform of Employment Law

07 Dec 2011

On 23 November the Secretary of State for Business Innovation and Skills announced proposals to make significant changes to employment law and practice. The proposals are:

  • claims to the Employment Tribunal must be submitted through ACAS which will promote conciliation before litigation;
  • the introduction of "protected conversations" in which employers will be able to "…raise issues such as poor performance or retirement plans in an open way, free from the worry it will be used as evidence in a subsequent tribunal claim";
  • to simplify compromise agreements;
  • for a rapid resolution scheme in the Employment Tribunal, designed to speed up the resolution of straightforward cases.  This might involve an independent legal expert deciding cases on written submissions;
  • to review Employment Tribunal procedure, including the introduction of fees;
  • to close the loophole in the Public Interest Disclosure Act which enables employee's complaints of breach of contract to be run as whistle blowing claims
  • to increase the qualifying period for claims of unfair dismissal to two years;
  • for compensated, no-fault, dismissals for businesses with ten or fewer employees;
  • for shorter dismissal procedures;
  • to speed up Criminal Records Bureau checks and the process of updating them;
  • to review the Agency Workers Regulations (AWR) and the rules regulating employment businesses;
  • to simplify the National Minimum Wage Regulations;
  • to consider reducing the statutory consultation period in collective redundancies;
  • to consider simplifying TUPE; 
  • to review sickness absence; and
  • to develop and extend rights to flexible working practices and maternity and paternity leave. 

Other proposals that were not included in the announcement but are on the agenda are (i) plans to allow Employment Judges to sit alone in unfair dismissal cases; (ii) costs awards of up to £20,000 against vexatious claimants; and (iii) fines of up to £5,000 for employers who breach employee's rights where the breach has aggravating factors.

We have learnt to be wary of Governments promising the earth but there is some good news for employers here, especially with the closure of the Parkin v Sodexho loophole which will stop most employee whistle blowing claims.  These have become a claim of choice and their removal is welcome.

Employment agencies will welcome both the proposed review of the rules under which they operate and the AWR (which only came into force on 1 October). This may be an indication that the Government now realises that it has got these regimes wrong.

The review of the Tribunal's rules and the proposal for rapid resolutions are interesting but we are sceptical because rules have a habit of regenerating themselves.  We are also not sure about protected conversations which may simply institutionalise poor management practices.  This has uncomfortable echoes of the equally well intentioned but disastrous Statutory Dismissal and

Disciplinary Procedures.

The increase in the qualifying period for unfair dismissal is generating a lot of heat.  It is difficult to see the logic in this because an employer which is effectively managing its workforce will not have a problem with the existing qualifying period.  The majority of respondents to the recent consultation disagreed with the proposal and the Government's figures (a reduction of 4,000 claims per annum) indicate the impact of this change will be less than originally anticipated.  We think this is a concession to the CBI. We expect to see lots of short term contracts for the young and groups such as ladies returning to work after breaks to bring up children so do not be surprised if the net effect is discriminatory.

As for the promised review of TUPE, the current rules have settled down well since they were last changed and we all have a pretty good idea of how TUPE operates.  Discounting the tables, the Regulations only run to 19 pages and we can think of plenty of other legislation which demands simplification before TUPE.