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Business Secretary Vince Cable recently announced sweeping changes to the employment law system as part of the push for growth.  The aim is to strike a balance between cutting unnecessary demands on businesses whilst also safeguarding workers’ rights.  Many of the proposals arise as a result of a consultation on resolving workplace disputes and the “Red Tape Challenge” review of employment law.

A package of measures will retain key protections for employees, but also, fundamentally, improve the way employers take people on, manage disputes and let people go.

Changes proposed include:

• a call for evidence on two proposals in response to the suggestion that dismissal laws are too onerous for small businesses in particular. The government is seeking views on a proposal to introduce compensated no fault dismissal for micro firms, with fewer than 10 employees.  It is also looking at ways to slim down existing dismissal processes, how they might be simplified, including potentially working with the Advisory, Conciliation and Arbitration Service (ACAS) to make changes to their Code, or supplementary guidance for small businesses. 

• an overhaul of employment tribunals.  Simplifying the employment tribunals system for businesses will result in fewer claims each year. 

• a call for evidence on the consultation rules for collective redundancies and whether the current 90 day minimum period for more than 100 redundancies can be reduced. Ministers are keen to see what impact this has on the restructuring of businesses, whether this acts as a barrier to employer flexibility in the labour market and how any change might affect employees’ access to alternative employment or training.

• a consultation on the introduction of fees for anyone wishing to take a claim to an employment tribunal. The proposals will transfer the cost burden from taxpayers to users of the system and encourage claimants to consider seriously the validity of their claim. The consultation will seek views on two options. The first proposes a system that involves payment of an initial fee to lodge a claim, and a second fee to take that claim to a hearing. The second option proposes introducing a £30,000 threshold, so those seeking an award above this level will pay more to bring a claim.

• the “Red Tape Challenge” has identified more than 70 regulations which can be merged, simplified or scrapped.

• a call for evidence on proposals to simplify the Transfer of Undertakings (Protection of Employment) - TUPE - rules which many businesses say are too complex and bureaucratic.

• closing a whistle-blowing case law loophole which allows employees to blow the whistle about their own personal work contract.

• merging 17 National Minimum Wage regulations into one set 

• consulting to streamline the current regulatory regime for the recruitment sector

• creating a universally portable CRB check.

As part of the response to the Resolving Workplace Disputes consultation, the Government has committed to:

• requiring all employment disputes to go to the ACAS and to be offered pre-claim conciliation before going to a tribunal and from April 2012 increasing the qualification period for unfair dismissal from one to two years. 

• publishing a consultation in the new year on ‘protected conversations’ which allows employers to discuss issues like retirement or poor performance in an open manner with staff - without this being used in any subsequent tribunal claims. 

• appointing Mr Justice Underhill to lead an independent review of the existing rules of procedure governing employment tribunals. This review will look to address concerns that they have become increasingly complex and inefficient over time and are no longer fit for purpose. 

• a further consultation on measures to simplify compromise agreements, which will be renamed ‘settlement agreements’. 

• announcing plans to consider how and whether to develop a ‘rapid resolution’ scheme which will offer a quicker and cheaper alternative to determination at an employment tribunal. Any proposals would be the subject of a consultation.

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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.  The law may have changed since this article was published on the internet.

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