In keeping with the jubilee theme, Gemma Hill reports on the Queen’s Speech which was delivered at the State Opening of Parliament on 9 May. As always, it set out the Government’s legislative programme going forward, which, we were told, "will focus on economic growth, justice and constitutional reform". Within the various announcements made during the speech there were a number of employment-related Bills which are set out in more detail below.
As expected the employment law related content of the Queen's Speech followed on from the raft of announcements which have been made by the current Government on their plans to reform aspects of employment law. Many of these were made in the latter part of 2011 and reported on by us in the Update on Employment Reforms and Change is Most Certainly Afoot in the Employment Law World articles.
There were also reforms announced this time last year, with the publication of the consultation on Modern Workplaces (which we reported on back in May 2011). This document saw proposals for period of shared parental leave (following an 18 week period of maternity leave for mothers) and an extension of the right to request flexible working to all employees who have at least 26 weeks' continuous employment. We are currently awaiting the response to the consultation; despite being told it will be published in “Spring 2012” it has not yet appeared.
There were three intended Bills which are of particular interest to employers and employees alike. These were the Enterprise and Regulatory Reform Bill, the Children and Families Bill and the Crime and Courts Bill.
Enterprise and Regulatory Reform Bill
This Bill is a business Bill which, according to the Briefing Notes to the Speech, is intended to "create the right conditions for economic recovery by strengthening the business environment, reducing regulatory burdens and improving business and consumer confidence". As part of this it is intended to overhaul the employment tribunal system and transform the dispute resolution model. The Bill was introduced on 23 May and can be found in full here.
The main aims of the Bill, as set out in the Speech, are to:
- encourage the earlier resolution of disputes;
- deliver a more efficient and streamlined employment tribunal system for all users; and
- give employers more confidence to hire new staff, so as to support growth.
Since the publication of the Bill, further clarification has now been provided on exactly how these aims are intended to be achieved. The main provisions are as follows:
- Early Acas conciliation
The Bill introduces a duty on parties and Acas to attempt pre-claim conciliation. Clauses 7 to 9 of the Bill would amend the Employment Tribunals Act 1996 (“ETA 1996”) (which currently contains the provisions on when Acas can help parties conciliate) to introduce a new following 4-step procedure:
- Step 1: Before lodging a claim a prospective claimant must send Acas "prescribed information" in the "prescribed manner".
- Step 2: Acas must then send a copy of the information to a conciliation officer.
- Step 3: The officer must try to promote a settlement within a "prescribed period".
- Step 4: If a settlement is not reached (either because settlement is not possible or the prescribed period expires) the officer must issue a certificate to that effect. A claim cannot be submitted without proof of this certificate.
One of the effects of this 4-step process is that the time period between Steps 1 and 4 will be discounted from any time limit calculation; if the time limit for bringing a claim would have expired between Step 1and Step 4, the time limit will instead expire one month after Step 4.
- EAT Hearings
The Bill intends to amend current legislation (ETA 1996) to allow judges in the EAT to hear cases alone, unless directed otherwise.
- Unfair dismissal compensatory award
At present this award is capped (and reviewed annually); the Bill allows the Secretary of State to order a variation of the statutory limit on the compensatory award in the following ways:
- a specified amount of between one and three times' median annual earnings, based on official figures;
- a specified number, not less than 52, multiplied by a week's pay of the individual; or
- the lower of the above two amounts.
Significantly, the Bill provides that the fixed amount may differ, depending on the "description" of the employer. This may mean that there will be a tariff based on the size of the employer, albeit at this stage this has not been confirmed.
- Financial penalties
Following the Government's response to the Resolving Workplace Disputes consultation, as above, the Bill provides for a financial penalty to be paid by a losing employer into the Consolidated Fund if the breach of the employment right in question has "one or more aggravating features". To date, we have no further information on what is meant by “aggravating features”.
The Bill confirms that the penalty would be 50% of a financial award ordered by the tribunal against the losing employer, subject to a minimum of £100 and a maximum of £5,000. If an employer pays 50% of the penalty within 21 days, their liability is discharged.
- Compromise agreements
Again, following on from a recent government review, the Bill implements the announced change of name from “compromise agreements” to "settlement agreements". It has previously been explained that they have been renamed to more accurately reflect their function and encourage greater use.
Current legislation protects workers who blow the whistle about breaches of their own employment contract, rather than specifically require that qualifying disclosures must be made in the public interest. The Bill will block this ‘loophole’ and provide for all qualifying disclosures to be made in the public interest, as well as in the reasonable belief of the worker making the disclosure.
- Indexation of awards and payments
Increases to a week's pay are currently rounded up to the nearest £10, which is sometimes well above the RPI rate of inflation. The Bill provides for this to be removed and replaced by rounding-up to the nearest £1.
- Equality and Human Rights Commission
The Bill would amend the Equality Act 2006 to change the EHRC's general duty and powers.
Children and Families Bill
Amongst other things (including law reform in the areas of adoption and children with special educational needs) this Bill will see measures proposed that “make parental leave more flexible so both parents may share parenting responsibilities and balance work and family commitments”.
This explicitly refers to giving parents access to flexible parental leave, so that mothers and fathers can share caring responsibilities. Without further detail at this stage it is anticipated that this will encompass the proposals as set out in the Modern Workplaces consultation, as above.
One area which caused some confusion was that at no stage in the Queen's Speech itself, or in the substance of the background briefing notes on the Bill, was flexible working referred to. However, in the section of the briefing notes which explains the Bill's jurisdictional scope, a BIS statement does state that "BIS will be jointly introducing, with the Department for Education, a Bill for shared parental leave and flexible working". From this reference, it has therefore been interpreted that it too will follow the proposals in the Modern Workplaces consultation in this regard and include a provision which provides employees with 25 weeks' service the right to request flexible working (currently, the right is only available to parents of children under 17, parents of disabled children under 18, and some carers).
As well as being covered in the 2011 consultation on Modern Workplaces, these issues were also discussed in the 2008 consultation on implementing the recommendations of Imelda Walsh’s Independent Review, ‘Amending and extending the right to request flexible working to parents of older children’. The Government response to this is on the BIS website.
Crime and Courts Bill
The Queen’s Speech explained that the aims of this Bill included "ensuring a swifter, more open, efficient and effective court and tribunal system". However, it was unclear at that stage whether or not it would address employment tribunals. This issue has now been cleared up as the Bill was introduced into the House of Lords and received its first reading on 10 May.
As the name suggests, the Bill is heavily focused on crime; however there are some provisions which are of relevance to employment tribunals:
- Cameras in court. The Bill includes the power for the Lord Chancellor to make further regulations relaxing the ban on filming and broadcasting court proceedings. It is intended that cameras will be allowed in the Court of Appeal (currently they are only permitted in the Supreme Court). As yet, there has been no announcement about employment tribunals or the EAT.
- Fee remission and information sharing. Following the announcement that fees are to be introduced in employment tribunal cases, either next year or the following year, clause 21 of the Bill will facilitate the sharing of information between HM Revenue & Customs (HMRC) and HM Courts & Tribunals Service (HMCTS) for the purposes of means-testing parties who apply for remission of tribunal fees.
- Judiciary. Clause 18 and schedule 21 provides reforms to the judicial appointments process in the hope of encouraging greater diversity (for example, by facilitating the appointment of more part-time judges), whilst clause 19 and Schedule 13 include provisions to make judges more ‘mobile’ (for example, District Judges could also sit in an employment tribunal, and District Judges and Circuit Judges could sit in the EAT).
Pensions Bill and Public Service Pensions Bill
During the speech the Queen announced that the Government will be bringing forward measures to “modernise the pension system and reform the state pension, creating a fair, simple and sustainable foundation for private saving” and to “reform public service pensions in line with the recommendations of the Independent Commission on public service pensions”.
The purpose of the Bill is to reflect recent discussions and agreements between the Government and a number of different bodies regarding pension provisions and, importantly, to ensure the measures introduced are sustainable.
Neither of these Bills have yet been published and so we know a very limited amount on what exactly the measures will provide for at this stage.
What does this mean for me?
Whilst very little of what has been announced is ‘new’, this speech clearly demonstrates a significant step forward. As a result of the Queen’s Speech, a clear indication has been given that a large number of employment-specific measures have moved on from being aspirational and discursive to becoming the basis of future legislation. There is still some way to go before the legislation comes into force, but it is fair to say that the future will see some significant changes to the employment law landscape which, in turn, will have an effect on those in the workplace, be they employers or employees.
The full details of the Children and Families Bill, as well as the two pension Bills, will not be known until they are published and we will ensure that any further developments will be followed up in later editions of Employment Eye.