Government announces further proposals for changes to employment law

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The Government has today made an announcement with regard to its proposals for further change on employment law. We summarise the main points below.

Detail

  • Proposals for a ‘no fault dismissal’ have been abandoned (Adrian Beecroft’s controversial proposal, reported here in May, was to prevent employees working for small businesses from bringing an unfair dismissal claim in respect of their dismissals where employers provided monetary compensation).
  • A consultation has today been launched on ending the employment relationship by means of ‘settlement agreements’. The consultation includes draft letters which employers could send to their employees with offers of termination and includes materials to help draft settlement agreements. The consultation seeks views on guideline tariffs for settlement. ACAS has been asked to provide a new Code of Practice for settlement agreements.
  • The consultation launched today also seeks views on reducing the cap on the compensatory award for unfair dismissal (which currently stands at £72,300). It also asks for views on the proposed methodology for calculating the cap - the proposals are a cap of up to 12 months’ pay, a new, reduced upper limit and a limit linked to the size of the employer.
  • A consultation starts today how to further streamline employment tribunals. It is still intended that the new rules will come into force next April, with an emphasis on the more effective weeding out of weak claims at an earlier stage and reducing the number of hearings.
  • Fees for employment tribunal users – BIS will announce that they will work with the Ministry of Justice to ensure that the remission system (which we have criticised) ensures that those who can pay a fee do so. Fees are due to be launched next summer.
  • BIS has committed to formally responding to the call for evidence on TUPE and to a future consultation before the end of 2012.
  • Government is currently consulting on changes to the collective redundancy consultation rules, seeking views on a reduction of the current 90 day limit to 30 or 45.

Click here for a copy of the Government’s press release.

Today’s announcement provided welcome confirmation that government is refocusing on some of the issues that matter for growth such as TUPE, reform of employment tribunals and settlement agreement. We have, however, expressed our concerns that the overall package contains nothing to speed up progress on delivering these reforms and will leave employers feeling underwhelmed.

Watch this space - we will provide a more detailed briefing next week once we have had a chance to review the detailed consultation documents.

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