In recent months there have been a notable number of announcements and emphatic speeches from the prime minister and his government regarding changes to employment law.  Sarah Lamont has looked into these in more detail and sets out the various proposals and suggestions. 

The Government’s current Employment Law Review is looking at policies and regulations applicable to employers and employees to assess whether they are necessary and appropriate in regard to their content, complexity, implementation and enforcement.  The Review has already resulted in a number of changes and implementations, such as the launch of an Employer’s Charter to set out what employers about what they can already do to deal with staff issues in the workplace; a review of the compliance and enforcement regimes for employment law, with the aim of streamlining the system; and commissioning an independent review jointly with DWP of the system for managing sickness absence (the latter of which is referred to in more detail in this month’s Employment News section.

The government’s Red Tape Challenge has also undertaken a ‘spotlight’ on Employment Related Law, which is part of the overall review and specifically involved the examination of 159 regulations.  It has now been announced that of those regulations over 70 are to be merged, simplified or scrapped, meaning that less than 60% will remain untouched.

Whilst the debate between employers, the government and the courts regarding employment law is far from new, the recent economic climate, coupled with repeated calls from employers who feel that current legislation is a barrier to necessary development and growth, has highlighted the need for reform in this area.  The government, therefore, is appearing to be tackling this thorny issue head-on and a significant number of legislative developments and amendments have been announced over recent months.

The most recent of these announcement was made last week by the Business Secretary Vince Cable who announced the government's proposals for what could be a potentially significant overhaul of employment law or, in the words of the Department for Business, Innovation and Skills   (‘BIS’), “the most radical reform to the employment law system for decades”. This speech coincided with the result of the Red Tape Challenge and the government’s publication of their response to the Consultation on Resolving Workplace Disputes.  This publication is impressive, not just in size, but in the length to which some of these reforms appear to go in changing the current employment landscape for both employees and employer.  Whilst some of these reforms were leaked prior to the announcement, others had been successfully kept under wraps; in brief the reforms include:

The main proposals for matters regarding employment tribunal claims are:

  • unfair dismissal qualifying period to increase to two years (as set out in our News Update);
  • lodging all claims through Acas to seek mediation, before being formally lodged with the employment tribunal;
  • options for a 'rapid resolution scheme', to enable simple claims to be settled within three months;
  • clarification that compromise agreements can be used to settle discrimination claims (specifically addressing the current concern caused by poor drafting in the Equality Act 2010);
  • From April 2012 Employment Judges to sit alone in unfair dismissal cases and witness statements to be taken as read in all regions (rather than read out loud); and
  • Commissioning a comprehensive review of employment tribunal rules of procedure, on the basis they are “increasingly complex and inefficient” and "no longer fit for purpose”.

In addition to the above, Consultations are to be conducted for the following proposals:

  • the introduction of “protected conversations” in the workplace, to allow frank discussions between employer and employee (or worker) regarding concerns such as poor performance and retirement, without the risk of this being brought up in a subsequent employment tribunal claim (please note this ‘protection’ would not cover discriminatory actions in such conversations);
  • reducing the minimum period for redundancy consultation for more than 100 redundancies from 90 days to 60, 45 or 30 days;
  • the introduction of fees for lodging employment tribunal claims(as set out in our News Update]); and
  • measures to simplify compromise agreements, including renaming them ‘settlement agreements’ an creating standard drafting to be used.

Other proposals for change include:

  • complaints about breach of employment contract to be taken out of whistleblowing law;
  • the introduction of financial penalties on employers who breach employment rights;
  • CRB checks to be transferable between employers to avoid the need for new applications; and
  • ‘Modernisation’ of maternity and paternity leave to ensure "shared and flexible parental leave"

Calls for evidence and views are being sought on:

  • compensated no-fault dismissals for ‘micro-businesses’ (those with no more than 10 employees);
  • options for simplifying existing dismissal processes, which may working closely with Acas to amend their Code, or supplementary guidance for small businesses; and
  • proposals to simplify the complex Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

Whilst this recent announcement will no doubt bring with it a raft of critical analysis and scrutiny, there is no doubt that many of these proposals will be widely welcomed by many, whether they are an employer, an employee or simply a tax payer.  For example the proposals to be consulted on regarding employment tribunal fees will transfer the cost burden from taxpayers to users, whilst also - hopefully - encouraging claimants to give potential claims serious thought before lodging them.  However, the ‘get out clause’ that was hinted at last month - that those on benefits would be exempt from fees – has led many to question the extent to which this proposal would really effect the number of claims being heard in the employment tribunals. This is, perhaps, simply one of many examples which bring into question the extent to which these changes will make a real difference. 

At the moment we really do not have anything more concrete that a collection of consultation documents and a list of future proposals but it is expected that we will begin to see real changes to legislation and policies as early as April 2012. 

Whether the reforms announced by Vince Cable will materialise in full, or generate the estimated savings (of more than £10 million a year for business and benefits to employers of more than £40 million a year), or prove to be less complicated that the current policies and regulations remains to be seen.  We will of course keep you informed on this issue and provide regular updates as and when developments occur.