Latest News

Employment law set for major reform

Business Secretary Vince Cable has set out plans for major reform of employment law.

The package of measures, announced on 23 November, include an overhaul of employment tribunals, expected to deliver £40 million a year in benefits to employers. There will also be a call for evidence on whether the 90-day minimum consultation period for collective redundancies should be reduced.

Dr Cable said the UK labour market was already one of the most flexible in the world but that many employers still felt that employment law was a barrier to growing their business.

He said his reforms were focused on “making it easier for businesses to take on staff and improving the process for when staff have to be let go”, adding: “We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business.“

The announcement includes a call for evidence on proposals to introduce compensated, no fault dismissal for firms with fewer than ten employees and on ways to slim down and simplify existing dismissal processes.

The Ministry of Justice will also shortly publish a consultation on two options for introducing fees for anyone wishing to take a claim to an employment tribunal. The first option is for a system that involves paying an initial fee to lodge a claim, with a second fee to take that claim to hearing. The second proposes introducing a £30,000 threshold, so those seeking an award above this level will pay more to bring a claim.

Other changes include:

• publishing a call for evidence on proposals to simplify the TUPE  (Transfer of Undertakings (Protection of Employment))  rules
• creating a universally portable CRB check that can be viewed by employers instantly online, from early 2013
• requiring all employment disputes to go to the Advisory, Conciliation and Arbitration Service (Acas) 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
• further consulting on measures to simplify compromise agreements, which will be renamed settlement agreements. Under a compromise agreement, when employment relationship has broken down irretrievably, an employee receives a negotiated financial sum to end their contract and agrees not to bring further claims against their employer
• 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.

Link: Dr Cable’s speech