All change - fundamental changes to Employment law announced

21 March 2012

The Government has signalled its intent to turn over a new employment law leaf in 2012 by introducing some radical alterations to current employment law.  Many of the proposals are as yet just that, proposals, with no details as to how the changes will operate in practice. 

Nonetheless, the Government has signalled a firm intent to introduce the following alterations to current practice:

• From 6 April 2012, the qualifying period of continuous service that employees will have to serve before being able to bring an unfair dismissal claim will increase from one year to two years.

• The Government has signalled an intention to introduce fees to employees for bringing employment tribunal claims from 2013.  There may be an initial fee to launch the claim in the first place (at different “levels” depending upon the type of claim), and then a second fee to take the claim to a hearing. Alternatively, there could be a higher fee to be paid at the outset if the claimant is seeking more than £30,000 by way of compensation. The new system will come into force either in 2013 or 2014 depending upon which option is ultimately chosen.

• The loophole in the whistle blowing legislation that allowed an employee to “blow the whistle” on breaches of his or her own employment contract and count that as a qualifying disclosure under the legislation is to be closed.

• In the future, the Government intends for unfair dismissal claims to be heard by an employment judge alone without lay panel members (from the side of industry and the Unions).  A significant development: no more “industrial jury” for such cases.

In addition to these firm proposals, the Government has also announced that it will consult on the introduction of “protected conversations” which will be privileged discussions with employees that cannot be used against employers in employment tribunals.  In most circumstances the old fashioned “without prejudice” conversation that was thought to have the same effect cannot be used in the workplace in the absence of a pre-existing dispute since the 2004 decision in BNP Paribas v Mezzotero.

Other initiatives include possible steps to extend the use of work place mediation and pre-claim conciliation through Advisory, Conciliation and Arbitration Service (Acas).  The Government also hopes to simplify the settlement of employment law claims, including the renaming of compromise agreements to “settlement agreements”, and introducing a standard form of words for the same.  Employees will need to pay fees in order to bring claims before the employment tribunal (the idea being to make them think twice before doing so, thereby decreasing the number of “speculative” claims being made).

There is also currently an examination of the rules which impose obligations to consult “collectively” whenever a large number of redundancies are being made, so as to see if the current 90 day consultation period, mandatory where 100 or more redundancies are proposed in a 90 day period, might be reduced to 60, 45 or even 30 days.  Employers with 10 or fewer employees may be allowed to engage in “no fault” dismissals on payment of a prescribed amount - possibly equivalent to a statutory redundancy payment.  The Government is also looking at whether the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), as currently implemented, goes further than what is required under EU law and scaling it back accordingly.

In the employment tribunal, further changes can be expected once Mr Justice Underhill completes his fundamental review of the employment tribunal rules in April 2012.  The Government has also indicated that it intends to introduce financial penalties on employers that breach employment rights where the breach has an aggravated feature.  Such penalties will be in the form of a “fine” to be paid to the Exchequer rather than to the aggrieved employee. Finally, there has been a successful pilot of a new listing policy in the employment tribunal at Manchester.  Straightforward unfair dismissal claims and other “short track” claims are being listed there for a one day hearing within sixteen weeks of a claim being issued.

All signs are that the Government will be seeking to “streamline” as much employment law as it can, at least in areas where its hands are not tied by European law, in an order to improve employer confidence in taking on employees and thus kick-start the economy in 2012.

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