In a series of recent announcements, the Government has set out a range of proposals as to how it intends to reform employment law. Stephen Moore of Ashfords offers advice on the details.
The overriding aim of these proposals is to reduce the perceived burden of regulation on employers, increasing their confidence to take on new staff and promoting economic growth.
The changes currently being considered by the Government include the following:
Increasing the qualification period for Unfair Dismissal claims from one to two years: It has been confirmed that this change will come into effect on 6th April 2012. However, there has, as yet, been no indication of whether any transitional provisions will apply, to protect those employees with between one and two years of service who currently qualify but otherwise would not from April next year.
This change will not affect an employee’s ability to bring discrimination claims, as there is no qualifying period of employment for such claims.
The introduction of fees for bringing Employment Tribunal claims: The details of the proposed fees have not yet been announced. It is believed that they will be introduced from December 2013, and that claimants on low incomes will be exempt. It has been suggested that such fees will discourage weaker, more speculative claims. Clearly, the level of the fees and how many potential litigants will be exempt from paying them will be crucial in determining how effective this will be.
Compulsory pre-claim conciliation: The Government has proposed that, in future, claimants will be required to submit their claims to ACAS, before making an Employment Tribunal claim. ACAS will then be under a duty to attempt to conciliate between the parties and resolve the dispute. Until this change is introduced, parties already have the option to make use of the existing ACAS pre-claim conciliation service. There will, of course, be many cases that cannot be resolved through conciliation, but for some disputes it would provide a quicker, more affordable means of resolution than the formal Employment Tribunal route.
Removal of lay members from Employment Tribunal panels: At the “earliest opportunity”, the Government intends to allow judges to hear unfair dismissal cases alone. Unless they decide otherwise, judges will be able to dispense with the two, non-legally trained members who currently sit with them. This decision has been taken in spite of a generally negative reaction to the proposal in the Government’s “Resolving Workplace Disputes” consultation.
Compensated no-fault dismissal: The Chancellor has confirmed that the Government is to seek views on the introduction of compensated no-fault dismissals. This was suggested in the controversial report prepared by Adrian Beecroft, which proposed that dismissed employees would be paid a fixed sum, based on a statutory formula, rather than being able to challenge the fairness of their dismissal in an Employment Tribunal. It appears that, at present, this is only being considered in the case of “micro-businesses”, that is, those with 10 or fewer employees. The reaction to the leaked “Beecroft Report” suggests that any attempt by the Government to implement a system of compensated no-fault dismissal will be resisted strongly by the unions.
The introduction of “protected conversations”. The Government has confirmed that it will consult, in the New Year, on the introduction of “protected conversations”. At this stage, there is no detail on exactly what these will involve. The basic idea seems to be that employers would be able discuss matters, such as retirement and poor performance, without the risk that these comments would later be used against them in an Employment Tribunal. It is expected that this protection will not extend to alleged discriminatory comments.
“Protected conversations” might help employers deal with poor performance concerns, which can be extremely sensitive; many employers are also concerned by the time that needs to be taken to deal with performance issues if they want to avoid unfair dismissal claims.
Relaxation of the Working Time Regulations: It has been rumoured that the Prime Minister is seeking a relaxation of the Working Time Directive (implemented in the UK by the Working Time Regulations), in exchange for supporting German proposals to reform fiscal rules in the Eurozone. It is already possible for workers to opt out of the weekly 48-hour limit provided by the Regulations, so the practical impact of any reforms on employers may be limited.
The creation of an Independent Assessment Service: The independent “Health at Work” review suggested that this service would provide a detailed assessment of an individual’s health after he or she had been signed off work for four weeks, in place of the current “Fit Note” regime. It would also provide advice to assist that individual on his or her return to work. The Government’s response to the review is awaited.
Reform of the rules relating to industrial action: The Cabinet Minister Francis Maude has suggested that legislation relating to industrial action is “under review”. In particular, he suggested that the CBI has made a “powerful case” for the proposal that a minimum of 40% of trade union members should have to vote in favour of strike action. This would avoid the situation where industrial action is taken even where there has been a very low turnout on the strike ballot – for example, only 22.5% of those entitled to vote actually voted in favour of the Unison strike on 30th November 2011. It remains to be seen whether any concrete reforms will be put forward on this issue.
Reform of collective redundancy consultation: The Government is in the process of gathering opinions on the reform of the system of collective consultation which applies in larger redundancy situations. In particular, it is considering reducing the 90-day consultation period required where an employer is proposing to make 100 or more employees redundant within a 90-day period to either 60, 45 or 30 days.
Possible amendment of TUPE: The Government has called for opinions on whether TUPE requires reform, in terms of whether it goes beyond the requirements of EU law and is overly bureaucratic. In particular, it has asked for views on whether the inclusion of “service provision changes”, which cover contracting out and bringing services back in house, creates additional burdens for businesses. Any reform of TUPE, if it happens, will be some way off: this informal “call for evidence” will need to be followed by a formal consultation in the New Year, and then by amendment of the legislation.
Many employers will welcome the trend towards reduced regulation that underpins these proposals. It is important to realise, however, that at this stage there is very little detail as to exactly what will change, and when these changes will come into effect. We will continue to keep you updated, and will also have available revised policies and procedures in advance of any of these changes taking effect.
