Radical Changes to Employment Law System

30th November 2011

As part of the Government's strategy to increase flexibility in the workforce, the most radical reform to employment law for decades has been announced following the publication of the Governments response to the Consultation on Resolving Workplace Disputes and the Red Tape Challenge Review, including:

• Unfair Dismissal: The Government intends to increase the qualification period for unfair dismissal protection from one to two years. It considers that this will have "a positive impact on business confidence", and will reduce the number of unfair dismissal claims by between 1,600 and 2,100.
• Compromise Agreements: The Government will create a "standard text" for compromise agreements, with guidance. It will consider amending the Employment Rights Act 1996 to allow compromise agreements to cover all existing and future claims without the need to list many separate causes of action. The Government will change the name of compromise agreements to "settlement agreements" in primary legislation.
• Protected Conversations: In 2012, the Government will consult on the introduction of a system of "protected conversations" that would allow either employers or employees to initiate a discussion about an employment issue "at any time...as a way of resolving the matter without fear".
• Mediation and Early Conciliation: The Government intends to introduce a requirement for all potential tribunal claims to be lodged with Acas, to give the parties a chance to resolve the matter through early conciliation. The basic early conciliation period will be one month. Where early conciliation is refused or is unsuccessful the claimant will be allowed to lodge his or her claim with the tribunal. The Government will also pilot the creation of regional mediation networks.
• Modernising Tribunals: The Government has asked the outgoing President of the Employment Appeals Tribunal, Mr Justice Underhill, to carry out a "fundamental review" of the Employment Tribunal Rules of Procedure, with the intention of producing a streamlined procedural code that addresses concerns that the Rules have become "increasingly complex and unwieldy over time". Underhill is to provide a recommended revised procedural code by the end of April 2012. In particular, employment judges will sit alone when hearing unfair dismissal claims. The Government will also increase the limit for deposit orders from £500 to £1,000 and for costs orders from £10,000 to £20,000.
• Financial Penalties: The Government intends to introduce a discretionary power for employment tribunals to impose a financial penalty on employers that have been found to have breached employment rights, payable to the Exchequer. The financial penalty will be based on the total amount of the tribunal award, with a minimum threshold of £100 and a maximum of £5,000. A penalty will be reduced by 50% if payment is made within 21 days.
• Rapid Resolution for Certain Types of Claims: The Government will consult on how to introduce a scheme to provide quicker, cheaper determinations in low value, straightforward claims such as those for holiday pay, with the intention of saving time and money. This scheme would be as an alternative to the tribunal process, and may not involve judges or oral hearings.

The Government also announced the following:

• TUPE: The Government has launched a call for evidence on the effectiveness of the TUPE regulations and how they might be improved. The Government is "concerned" that some businesses believe the TUPE regulations are "gold-plated" and overly bureaucratic.
• Collective Redundancies: The Government has launched a call for evidence regarding the rules governing statutory consultations on collective redundancies. In particular, it wishes to "explore the consequences" of reducing the current 90-day consultation period to 60, 45 or 30 days.
• No-fault Dismissals for Micro Firms: The Government will seek views on a proposal to introduce no-fault dismissals for companies with 10 or fewer employees.
• Fees for Tribunal Claims: The Ministry of Justice will shortly publish a consultation on introducing fees for tribunal claims, seeking views on two options: a system involving payment of a fee to lodge a claim, and a second fee to take that claim to a hearing; and a £30,000 threshold, so that claimants seeking an award of more than this will need to pay a higher fee.
• Whistleblowing: The Government will amend whistleblowing legislation to stop employees from being able to "blow the whistle" about breaches to their own employment contracts, which it says is not something that the legislation was designed to achieve.
• Maternity Leave: The Government reaffirmed its commitment to extend the right to request flexible working, and to "modernise" maternity leave so that it becomes "shared and flexible parental leave".
• Dismissal Processes: The Government will look at "radically slimming down" the existing dismissal processes, and seek views on how to achieve this, including, potentially, by making changes to the "Acas code of practice on disciplinary and grievance procedures".
• Criminal Records Bureau Checks: From 2013, once a CRB check has been completed, the results will be available online for employers to confirm that no new information has been added since the check was originally conducted. This will mean that CRB checks are portable, and that an employee will not have to have a new check every time he or she starts a new job.
• National Minimum Wage: The Government will simplify the legislation by merging the current body of 17 different regulations into one consolidated set.

The Government intends that some proposals, including the extension of the unfair dismissal protection qualifying period and the increase of the maximum amounts for tribunal costs and deposit orders, will come into force from April 2012.

Although we have yet to see how many of these will come into effect and in what form, what is certain is that Employment Law is set to change substantially in the coming years.

For further information, please contact employment@thomas-carroll.co.uk