United Kingdom

Major Employment Law Shake-up Unveiled

By Richard Lister

Changes SignII.jpgThe UK Government has announced wide-ranging plans for what it claims to be "the most radical reform to the employment law system for decades". The proposals were set out by the Secretary of State for Business, Dr Vince Cable, in a speech to the EEF manufacturers' organization. Some of the measures had been previously floated but others were novel, including:

  • amending the UK's whistleblowing legislation so that complaints by employees about a breach of their own employment contract will no longer constitute a protected disclosure;
  • seeking views on introducing compensated no-fault dismissals for "micro employers" with fewer than ten employees;
  • simplifying and "slimming down" the processes required to carry out a fair dismissal, including potentially working with the conciliation service Acas to change their Code of Practice on Disciplinary and Grievance Procedures;
  • consolidating the myriad regulations relating to the national minimum wage; and
  • streamlining the current regulatory regime for the recruitment sector.

Dr Cable also issued two "calls for evidence", one on whether the 90-day minimum consultation period for collective redundancies should be reduced, and the other on changes to the legislation known as TUPE which protects employees' rights on business transfers and outsourcing.

In addition, some significant changes in relation to Employment Tribunals were rather hidden away in the notes to the Department for Business, Innovation and Skills press release, including judges sitting alone without wing members to hear unfair dismissal cases from April 2012.

The Government has also published its formal response to the Resolving Workplace Disputes consultation that took place earlier this year. Amongst other things, the response reveals that the Government is committed to:

  • increasing the qualifying period for unfair dismissal to two years from April 2012 (as previously announced);
  • publishing a consultation on options for the introduction of Employment Tribunal fees;
  • introducing compulsory conciliation of all employment disputes by Acas before an Employment Tribunal claim can be brought;
  • consulting on "protected conversations", which would allow employers to have discussions with staff about retirement or poor performance that could not subsequently be relied on in tribunal proceedings;
  • giving Employment Tribunal judges the power to levy a financial penalty on employers found to have breached employment rights;
  • consulting on simplifying compromise agreements - to be renamed "settlement agreements";
  • developing a "rapid resolution" scheme to offer a quicker and cheaper alternative to Employment Tribunals for simple cases; and
  • commissioning a fundamental, independent review of the Employment Tribunal Rules of Procedure (PDF), to address concerns that tribunals have become complex, inefficient, and are no longer fit for purpose.

Dr Cable claimed that the various measures taken as a whole would "retain key protections for employees, but also fundamentally improve the way employers take people on, manage disputes and let people go". Whilst he emphasized that the package was "emphatically not an attempt to give businesses an easy ride at the expense of their staff", the response from British trade unions has been predictably scathing.

Photo credit: Janusz B

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