Ending the Employment Relationship – further clarity provided, but more needs to come, and soon

17 January 2013

This morning, the Department for Business Innovation and Skills (BIS) released a number of significant papers. These included its latest response paper in relation to the “Ending the Employment Relationship” consultation. 

This has provided welcome clarification as to where the Government has got to in terms of this important consultation process, and employers may well be pleased with much of what is proposed.  Significant proposals include a cap on unfair dismissal awards of 12 months or the (current) statutory cap, whichever is the lower, and the new “settlement agreement” procedure. This all relates to provisions in the Enterprise and Regulatory Reform Bill that is nearing the end of its journey through Parliament.

However there is a timing issue. The Government apparently wants everything in place for the Spring. If that is the case we really need to see published the proposed new ACAS Statutory Code and Guidance.  This is a vitally important piece of the jigsaw for the new environment, which the Government is hoping to introduce in a matter of weeks, and employers (and also their advisers!) will need to prepare.  As an example, employers will have to understand the extent to which any discussions they may have with their employees with a view to early settlement will be inadmissible should there come to be any subsequent Tribunal proceedings.  In other words they will want to be reassured that they will not run the risk that anything they say as part of that discussion, could nonetheless end up before the Court if the matter did not settle. Conversely, they will also want to understand how they might be found to have stepped over the line, and be said to have engaged in what is termed “improper behaviour”, such that their discussions will then be admissible before the Court. Employers are therefore going to want to consider the proposed guidance so they can see what exactly is to be meant by this phrase. Fortunately, in this context, it does look as though employers will not be expected to wrestle with the phrase previously used by lawyers in this respect, namely “unambiguous impropriety”. This was unsurprisingly  never an easy phrase to explain to the uninitiated.

The work that ACAS now has to produce is going to be critical.  Presumably that accounts for the delay. When, back in 2008, their initial draft of the Code of Practice on Disciplinary and Grievance Procedures, with the accompanying Guidance “Discipline and Grievances at Work: The ACAS Guide” was first published, it was found to be remarkably unsatisfactory.  However, a few months later the second draft appeared, and it was immediately apparent to those involved in the Consultation process at the time, that this was very much improved. Indeed it has gone on to prove to be a really helpful reference tool to all employers looking for practical and accessible guidance in disciplinary and grievance situations. 

It is interesting to note that the Government has taken the opportunity in the Paper released this morning, to clarify that it is genuinely not taking forward proposals to introduce “no fault dismissals”.  They were accused recently of seeking to introduce this concept via the “backdoor”, with the proposed introduction of new employee shareholder rights in return for giving up certain basic employment rights, such as the right to sue for unfair dismissal and to claim statutory redundancy payments.  However with respect to that proposal, we continue to await the outcome of the Government’s latest deliberations following their consultation at the end of last year. If they are really intent on introducing this new concept by April 2013, they are going to have to get a move on. The Government is beginning to run short of time on all of these fronts, and this includes the introduction of the new requirement for employees to pay fees if they want to institute proceedings before the Employment Tribunal. So much so in fact, that I am beginning to wonder if those working on these proposals at BIS, are at night, dusting off their copies of the Working Time Regulations to see if they are being asked to exceed the maximum limits in that respect.

Is anyone still taking bets on us hearing shortly that there has been a rethink in terms of the proposed timetable…?

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