employment law reform steps up a gear

Posted on February 27, 2013 by Martin Malone

The government is firming up on some of the many proposals to change employment law mooted in recent months, so we have a rash of consultation papers to digest and implementation dates to look forward to. (What happened to only introducing changes in April and October, to give employers a bit of a chance to keep up, by the way?) It seems that fees for bringing tribunal cases will come into force in July. Fees will be charged both to start a claim and before a hearing can be listed, and will range between £160 to start a simple low value claim, (for example about unlawful deductions) and £950 for a hearing in a more complex claim.

As well as there being an overall cap on unfair dismissal awards (increased to £74,200 from 1 February) there will be a secondary cap at 12 months’ pay – again to come into force this summer (Ending the employment relationship: government response to consultation). This will not stop any “fat cats” (remember them?) enforcing their contracts in the ordinary courts, but will affect those on low earnings with poor job prospects – perhaps because they lack qualifications or are nearing retirement age – always assuming they have been able to fund bringing a tribunal claim.

The plan to introduce a new “employee-owner” status ploughs inexorably on, despite a marked lack of enthusiasm from business. The Law Society has also weighed in with criticism, pointing out that such arrangements "will only add to red tape for small businesses and create confusion about worker’s rights". In a letter to the House of Lords Law Society president Lucy Scott-Moncrief said:

There is potential for costly satellite litigation on a range of complex issues which are likely to arise at the outset and upon termination of an employee’s contract.

For example, if an employer buys back forfeit shares when an employee leaves, satellite litigation could ensue on the question of market value. This runs counter to the government’s stated aim of supporting samll and medium-sized enterprises through simpler regulation.

She also pointed out that restrictions on an employee shareholder’s access to maternity rights and flexible working are "entirely incongruent" with the government’s stated commitement to family friendly policies.

Consultation has started on implementation of a compulsory early conciliation scheme (Early conciliation: a consultation on proposals for implementation), whereby claimants will have to refer themselves to ACAS for early conciliation and will not be able to lodge a claim unless they have done so. Continue reading →

what are “settlement agreements” and how, if at all, do they differ from compromise agreements?

Posted on June 27, 2012 by Martin Malone

During the second reading of the Enterprise and Regulatory Reform Bill on 11 June Vince Cable announced that the Government wants to promote and increase the use of agreements relating to the termination of employment as an alternative to employment tribunal proceedings. No details were provided but the intention is to "ensure that the offer of a settlement cannot be used against an employer in an unfair dismissal case". But, hang on, isn’t that what a compromise agreement under the current legislation does and are these new settlement agreements going to be confined to unfair dismissal claims?

It has been suggested that, for small employers, there will be no need to obtain legal advice. But small employers do not need legal advice as matters stand: it is employees who must obtain advice in order for an agreement to be binding. Clearly, employees might not know whether a proposed settlement is fair and reasonable given the circumstances and the requirement to obtain legal advice is intended to address this understandable lack of knowledge. However, the Government has suggested that employees will continue to enjoy full employment protection because they can reject a settlement offer and proceed to an employment tribunal. Continue reading →

after the fuss about Beecroft – what are the real changes likely to come into effect?

Posted on June 26, 2012 by Martin Malone

The pace of change never gets any slower in employment law, and I have quite a few consultations and proposals to report. It remains to be seen how many of them will become law, and in what form, but after a couple of well publicised retreats over the budget, and the leaking of the Beecroft Report in advance of its release in slightly different terms, perhaps a considered and thoughtful approach will be taken to them.

I should first confirm what is not happening. The key proposal in the Beecroft report for "compensated no-fault dismissals" has been omitted from the Enterprise and Regulatory Reform Bill which is currently making its way through the Commons. Instead, a clause proposing "new" voluntary settlement agreements (compromise agreements under another name and about which more below) has taken its place and most people are regarding that as the quiet death of Mr Beecroft’s proposal.

It is known that of 135 businesses consulted only 38% were in favour of the proposals which most considered to be unnecessary. Many have commented in the press that they have far more important things to worry about at the moment.

The strength of feeling about Beecroft’s contribution was demonstrated particularly well by an article in The Times (behind paywall) which described the report as "short on evidence and long on recommendations – and the prejudices of its author are never far from view" and this was why it was “leaked, published and strangled at birth in a matter of hours".

So what is to be expected? Continue reading →

TUC rails against "chequebook justice" in tribunals

Posted on January 26, 2012 by Martin Malone

In a widely reported speech made on 20 January, TUC general secretary Brendan Barber has launched a vigorous attack on what he has called "chequebook justice" as a result of the government’s plans to introduce fees for employment tribunal proceedings.

Under the proposals claimants will have to pay an initial fee on commencement of proceedings of between £150 and £250. There will be an additional fee of £250 to £1250 if the matter goes to a hearing with a potential award of over £30,000, or £200 to £600 if compensation is limited to a maximum £30,000. Fees for discrimination claims will be as much as £1750. Many have commented that expecting people who have just lost their jobs to pay fees in order to pursue claims of unfair dismissal or discrimination is rather perverse. On the other hand, according to Department of Justice minister Jonathan Djanogly, the latest figures show that the employment tribunals service costs the taxpayer £84 million per annum. Continue reading →

BIS launches mediation trials but are they necessary?

Posted on January 26, 2012 by Martin Malone

On 23 January the Employment Relations Minister, Edward Davey, announced a pilot scheme for regional mediation networks for SMEs.

This has resulted from the government’s Resolving Workplace Disputes consultation which opened with the consultation document in January 2011 and closed with the government’s response in November 2011.

Located in Cambridge and Manchester, BIS will fund mediation training for employees from a group of 24 SMEs in each of the pilot areas. A network of trained mediators will be available to provide mediation to other organisations with a view to resolving workplace disputes without the need for employment tribunal proceedings. Continue reading →

alternative dispute resolution to be promoted

Posted on December 8, 2011 by Martin Malone

As part of the government’s review of employment law strategies to reduce the number of claims which get as far as a tribunal are less controversial, and, some might say, less pro-employer.

ACAS’ current power to conciliate will revert to a duty, and all cases will be referred to voluntary early conciliation before employment tribunal proceedings are started, with an extension of a month to the time limit for bringing claims to allow for this. ACAS has a reasonable track record of success in such early conciliation, but the crunch will be whether they have the resources to cope with the level of work. The need to increase resources is recognised, with the government saying that the additional funding needed will be paid for from the savings made elsewhere. It has to be observed that referral to ACAS in past similar arrangements which operated until 2009 frequently amounted to little more than a few phone calls. Accordingly not too much should be expected from this initiative. Continue reading →

good in parts: radical reforms of employment law

Posted on December 8, 2011 by Martin Malone

The top headline news this month has to be the mixed bag of employment law proposals announced as “the most radical reform to the employment law system for decades“. And what a mixed bag it is – everything from tidying up the unintended consequences of statutory drafting to a root and branch review of employment tribunal procedure by way of revisiting some familiar old ideas. Opinion is, of course, divided as to how effective the proposals will be, not always along traditional employer/employee lines, but some at least seem welcome in all quarters – such as the introduction of a portable CRB check.

Many of the measures announced are aimed at reducing the numbers of cases going into the employment tribunal system, speeding up resolution of cases once they get there, and of course keeping costs down – for the government, rather than for employers or employees. Continue reading →