Government announces overhaul to employment law

As news of ‘double dip’ recession hits, the Government announces further overhaul to employment laws to help ailing businesses

Vince Cable

Last week saw further major movement in what the Government envisages for employment law in the future.  Many critics have claimed that it is just one step too far by the Conservative Government to further dilute the rights which the Labour Party have worked hard to ingrain over previous decades.

What is proposed?

The overhauls proposed following last weeks consultation were outlined by Business Secretary, Vince Cable.  Although many reforms had already been predicted, and reported in previous press releases, this announcement went that extra mile and detailed ways the Government will curtail existing unfair dismissal rights for individuals even further. 

Following Adrian Beecroft’s recommendations (detailed in a previous article), details of the Government proposal to increase the qualification period for unfair dismissal to two years, and introduction of tribunal fees to avoid vexatious litigants and/or claims which have no reasonable prospects of success were revealed.  The changes are to allegedly assist in instilling further confidence in business to hire and fire as they please for the first two years of employment. 

Fines for Employers

The latest consultation report goes further in detailing financial penalties which could be imposed against employers found to have breached employment rights.  The penalties would be half of the total compensation award made by the tribunal and would be payable to the Chancellor of the Exchequer.  The minimum penalties would be £100, with the maximum reaching £5,000.

Compromise Agreements

It was also alleged that compromise agreements (governing terms of the termination of an employee usually in consideration of monetary payment) are far too complex. There are suggestions that they will be renamed as settlement agreements and simplified perhaps removing the need for employers to be advised by a solicitor before the agreement is considered legally binding. 

ACAS

ACAS are an organisation appointed to assist in mediation and settlement of claims once the have been issued.  As soon as claimants submit details of their claim, they will be offered the option of engaging an early mediated conciliation to avoid both parties incurring unnecessary costs. 

New Rules of Procedure?

The employment tribunal procedure rules are ones which have needed reform for some time according to many critics as they are considerably more lenient than the Civil Procedure Rules.  Mr Justice Underhill, president of the employment appeal tribunal has been asked to report on deposit orders and wasted cost orders and provide suggestions for reform. Some suggest that this will see the Employment Tribunal process being unified with the general civil court procedure rules.

Paper Claims

Although there is already a fast track claim system in the employment tribunal for wages and outstanding holiday pay claims, the Government is to consider whether or not a determination could be given in these cases based only on papers submitted by the parties without having an oral hearing. 

Bye to long consultations

Two of the more surprising reforms are reducing the current 90 day minimum consultation period in large scale redundancies and reviewing the application of TUPE in insolvency situations.  This is perhaps most surprising as the current TUPE regulations are in line with European Law.

Whilst Vince Cable has strenuously denied allegations that this is just a further attempt by the coalition Government and in the main the Conservative Party to dilute workers rights, many are not convinced with his argument that this is an exercise to merely rebalance employment law and keep the protections already in place to protect employees.

One thing that is clear is that the future of employment law is currently unknown. 

If you are a business and/or individual requiring employment law advice, please do not hesitate to contact Miss Kaajal Nathwani of this office on 0208 363 4444 or alternatively via email on kaajal.nathwani@curwens.co.uk quoting special offer KKN/Hertfordshire Mercury for an initial free consultation.