Employment law reforms announced
Following months of speculation, Business Secretary Vince Cable has formally announced plans for what is being billed as a radical reform of employment law and the Tribunal system.
The following measures have been announced as part of the Government's plan for growth:
- The qualifying period for unfair dismissal claims will increase from one to two years from April 2012. It is intended that increasing the qualifying period will encourage employers to recruit more employees, as it will be easier to manage and dismiss them. However, it will undoubtedly lead to more (complex and costly) discrimination claims, which do not require any qualifying period.
- The introduction of fees to bring Employment Tribunal claims. The aim of this policy is to discourage frivolous or vexatious claims and is well overdue. The proposal will be subject to further consultation, to include the level of the fees. It also remains to be seen whether claimants who have lost their job and so may have limited means will be exempt, but all in all this must be a development to be welcomed.
- Removal of the "loophole" in whistle-blowing claims where employees can currently argue that a complaint about breach of their own contract of employment amounts to a protected disclosure. This is another welcome change and should hopefully reduce the number of cases dressed up as whistle-blowing claims in an attempt to circumvent the new two year qualifying period for unfair dismissal claims.
- Compulsory lodging of all claims through ACAS, for an attempt at mediation before they can be submitted to the Tribunal. Currently, a copy of the claim form and response is sent to ACAS by the Tribunal after the claim has been issued. There is however no proposal to make the ACAS early conciliation compulsory, so it is hard to see how this will have any major impact on the current system.
- Consultation on the introduction of "protected conversations", which would enable an employer and an employee to sit down and have "frank conversations" about performance/ongoing employment without fear that such conversations will be admissible in any subsequent Tribunal proceedings. It has however been made clear that this protection will not extend to any discussions that involve discrimination, so there could still be a fine line between what is protected and what is not.
- Discretion for judges to impose a financial penalty (in addition to the award of damages) on employers who breach employment rights, to be paid directly to the Exchequer. Indications are that this would only apply to employers who act unreasonably or where there are "aggravating factors" rather than automatically when a claim is lost. This has been described as nothing more than a stealth tax on employers, so it remains to be seen how it would be used in practice.
- Further consultation on reducing the collective redundancy consultation period to 60, 45 or 30 days in order to give businesses greater flexibility.
We will keep you updated on the progress of these plans.
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