Deregulation: less is more in 2011?

29 December 2010

The Coalition Agreement published on 20 May 2010 said that red tape would be cut by introducing a new “one-in one-out” rule whereby no new regulation is brought in without other regulation being cut by a greater amount. In August the government launched consultation on what regulations should be cut. Since then they have brought the main provisions of the Equality Act into force without any corresponding repeal of other legislation so they are already behind target.

Cutting regulation is obviously a good idea. (We lawyers have to spend hours examining the detail of regulations so no one hates them more than us.) Unfortunately, like a lot of good ideas, putting it into practice is much harder than it looks. A lot of the regulation that upsets employers the most comes from Europe and, since we cannot opt out of it, the best we can do is avoid making it more onerous than it has to be (what politicians call "gold-plating"). So the question is what regulations can be taken off the statute book?

A lot of people would be delighted if TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006) could be consigned to history. However TUPE implements European directive 2001/23/EEC/P so, broadly speaking, we are stuck with it. Lord Hunt identified the rules on service provision changes as “gold-plating” which could be disposed of but, having lived through the uncertainty created by the outsourcing cases under TUPE 1981, I prefer the certainty of these rules. As contracts have been priced on the basis that there will not be any redundancy costs on termination of the contract because TUPE will magically transfer the employees and all their associated liabilities to whoever takes the over the contract, a sudden change in the law could theoretically cause job losses, uncertainty and insolvencies. More realistically, as TUPE applied to outsourcings long before we had the service provision change rules, it would continue to do so even if those rules were repealed, making repeal largely a waste of time.

My personal favourite to go would be whistleblowing because, while the rules were introduced for good reason and there are some genuine cases, I spend a lot of time defending employers from wholly unmeritorious whistleblowing claims brought only to bypass the one year qualifying period for unfair dismissal and/or the cap on compensation. However, despite my personal prejudice these rules are here to stay.

Any suggestions for regulations that can and should go would be very welcome. As for me, I know lots of regulations I don’t like but I am not sure that in practice we could, or should, live without them. If the Coalition Government find on reflection that they can get rid of very little perhaps, at least, we will not have any new regulation under their regime, except for the Equality Act, the Agency Workers Regulations, extending flexible working to all employees, phasing out the default retirement age, rules to encourage shared parenting...

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