Monday, 28 November 2011

Reforming Employment Relations - Proposals announced

Last week was hectic for employment law commentators.  On 23 November the Department for Business, Innovation and Skills announced a suite of important changes to fundamental aspects of employment law and the Employment Tribunal system.  Here is a summary of the key changes/proposals:

Increase in qualifying service for unfair dismissal claims
From April 2012 employees will need two years of service to  bring a claim of unfair dismissal (currently one year).  This will not affect claims where no qualifying period of service is currently required ( eg, unlawful discrimination, whistleblowing, etc.)

Compulsory pre-claim conciliation of employment disputes
It will be compulsory for details of an employment dispute to be submitted to ACAS before proceedings can be issued in the Employment Tribunal.  ACAS will then have a duty to offer pre-claim conciliation and the parties can choose whether or not to engage.  It is hoped that this will significantly reduce the number of claims which are lodged in the employment tribunal.

"Rapid Resolution Scheme" for low-value claims
The government will consult on the introduction of a "Rapid Resolution Scheme" designed to accelerate the process of determining low-value, non-complex claims, such as those relating to wages, holiday pay, etc.

Financial penalties for employers who lose a claim
Employment Tribunals will have the power to order employers who lose a claim to pay an additional award to the exchequer of up to 50% of any award made to the claimant (subject to a minimum of £100 and a maximum of £5000).  This penalty will be reduced by 50% if paid within 21 days.  The award will be at the discretion of the Employment Tribunal but there is yet no detail on the parameters within which it will be exercised.

Call for evidence on reform to legislation governingTransfers (TUPE)
The Government has requested comments from employers in relation to possible reform of the legislation governing Transfers of Undertakings.  In particular, it is seeking views on the business impact of the inclusion of "Service Provision Changes" within the scope of TUPE 2006.  The closing date for comments is 31.01.12.

Call for evidence on reforms to collective redundancy consultation
There is also a call for comments on possible reforms to the legislation governing large scale, collective redundancy consultation  (20 or more),  including evidence on the advantages/disadvantages of a statutory 90 days minimum time period before dismissals can take effect.  The closing date for comments is 31.01.12.

Introduction of "Protected Conversations"
The government is to consult on planned legislative changes which will enable an employer and employee to have a frank discussion about performance or ongoing employment without the fear that such conversations will form evidence in any subsequent Employment Tribunal proceedings.

Fees to issue Employment Tribunal proceedings
The government has confirmed its intention to introduce fees to bring an Employment Tribunal claim.  This will form the basis of separate consultation in the coming months.

Reform of Employment Tribunal procedures
Proposals include:

  • Giving Employment Judges greater powers to strike out claims
  • Increasing the maximum deposit order which can be issued against a  claimant who brings a claim with little or no reasonable prospect of success from £500 to £1000
  • Increasing the maximum costs award from £10,000 to £20,000