Employment legislation: The Beecroft Report and key changes in the Enterprise and Regulatory Reform Bill

25 May 2012

The Beecroft Report has been in the news this week, with some heated parliamentary debate and plenty of media comment.  For those who have not read the Beecroft Report, it is striking in its brevity, lack of supporting evidence and confusion about the current state of the law.  It seems a missed opportunity for the Government which could have proposed some sound and useful changes to Employment Legislation and the Tribunal system.  Sensible changes would be welcomed by employers and employees alike.

The Enterprise and Regulatory Reform Bill has been laid before Parliament today and this contains a raft of changes to employment law, none of which reflect any suggestions from the Beecroft report.  This seems to be a strange process but leaving that aside, the key changes proposed in the new bill are:

  • A requirement that Claimants must send details of a claim to ACAS and for ACAS to try to conciliate between the parties before Tribunal proceedings can commence.  As yet unpublished guidance will be needed to flesh out how this is expected to work in practice;
  • The introduction of “legal officers” to make decisions in some cases if all parties agree in writing.  It is unclear who legal officers will be or what qualifications they will have.  Unless the parties have faith in the decision making abilities of legal officers, it is hard to see how parties will want to use them;
  • EAT cases will be heard by judges alone unless an order is made otherwise;
  • The Secretary of State has the power to change the limit on unfair dismissal compensation to a maximum between the national median earnings and 3 times national median earnings or to limit the unfair dismissal compensatory award to one year’s earnings.  The Department of Business, Innovation and Skills has said that they are working of median earnings of £26,000, which means the cap could be reduced to £26,000 or extended slightly to £78,000;
  • Tribunals will have the power to impose on employers a penalty of 50% of any financial award subject to a minimum of £100 and a maximum of £5,000 with a 50% discount for payment within 21 days.  As this penalty is low it is unlikely to pose much of a deterrent to employers beyond the embarrassment factor;
  • A change to the definition of “qualifying disclosure” in whistleblowing legislation so that only public interest disclosures will be covered.  This is a sensible move however as no definition of public interest is given it is not sure what this will achieve in practice.

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