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The Government has outlined plans to reduce the number of employment disputes going to an Employment Tribunal.

The proposals include plans to:

  • Introduce a 12 month pay cap on the compensatory award for unfair dismissal.
  • Make template letters available to encourage the use of the new settlement agreements, alongside a statutory code of practice which will include an explanation of improper behaviour.
  • Not set a guideline tariff for settlement agreements. Government will instead develop guidance outlining the issues that should be considered when deciding and negotiating the level of financial settlement.

In addition, the Government has recently launched three employment related consultations, on:

  • Proposals to implement the Acas Early Conciliation (EC) process.
  • Proposals to reform The Transfer of Undertakings (Protection of Employments) (TUPE), the legislation which protects employee rights when the business they work for transfers to a new employer.
  • Reforming the regulatory framework for employment agencies and employment businesses.

Acas will be publishing a draft Statutory Code for public consultation shortly.

Ahead of its submission to the government’s call for evidence on compensated no-fault dismissal, Britain’s manufacturers have called on the government to refocus its efforts on the areas of employment reform that will deliver genuine benefit for business.

In its submission EEF, the manufacturers’ organisation, has indicated that the concept of compensated no-fault dismissal commands little support from Industry, that its benefits would be limited and that it would make little or no difference to recruitment plans.

Furthermore, EEF is concerned that the controversy over this is diverting attention from many of the other proposals which command much greater support from business and, where government needs to move faster. To address this EEF issued a five point plan for employment reform:

1. Accelerating plans to reduce the 90 day consultation period for collective redundancy 30 days.

2. Delivering on commitments to reduce the number and length of Employment Tribunals by streamlining the process, making greater use of conciliation and requiring claimants to lodge fees ahead of making a claim.

3. Simplifying TUPE regulations to allow employers to harmonise terms and conditions of employees a year after the transfer of the business has taken place.

4. Helping employers to manage performance by introducing protected conversations which give employers a safe space to discuss performance issues with employees without triggering legal action and making it simpler to reach compromise agreements if the employment relationship has come to an end.

5. Clarifying its plans for shared parental leave and ensuring that any such system is kept simple to operate.

A raft of reforms have been announced after the Red Tape Challenge looked at how to simplify the Equality Act and remove unnecessary legislation.

Businesses and the wider public will be able to have their say on the reforms in a series of consultations. These will look at proposals to streamline the employment tribunal process and to scrap the Third Party Harassment law, which makes bosses liable if a member of staff is harassed by a customer.

The government will also clarify disability law for employers and remove the Socio-Economic Duty – which would have forced public bodies to consider class-based inequality when developing policy.

And it will review the Public Sector Equality Duty to establish whether this is the best way to ensure public bodies consider the impact of their decisions on different groups.

In the Queen's Speech at the official state opening of Parliament, the Government has outlined its priorities for the coming Parliamentary year.

With regards to employment, the Government intends to introduce an Enterprise and Regulatory Reform Bill, which will:

  • Overhaul the employment tribunal system.
  • Transform the dispute resolution landscape.
  • Strengthen the framework for setting directors’ pay by introducing binding votes.
  • Extend the Primary Authority scheme, reduce inspection burdens on business and strengthen the legal framework for sunset clauses on regulation.
  • Cut the burden on business and citizens by repealing unnecessary legislation.

The Chartered Management Institute welcomed the announcement. Petra Wilton, Director of Policy and Research, commented:

“These welcome measures should provide greater freedom for managers and leaders to create working environments that can fully engage employees and help drive UK economic growth. CMI’s member surveys show that more flexible working arrangements and shared parental leave have been demanded for many years by the majority of managers. The new Enterprise and Regulatory Reform Bill which promises to repeal unnecessary legislation and limit state inspections of companies is also very welcome, but businesses leaders will need to see the detail to see how much of the regulatory burden will be lifted in practice.” 

Employment tribunal changes have come into effect from Friday 6th April as part of the Government's employment law reform measures.

There were 218,000 tribunal claims in 2010-11, a rise of 44% since 2008-09, with each business spending nearly £4,000 per claim on average defending itself. There is an additional average cost of a £1,900 to the taxpayer per claim.

The changes mean that from 6th April:

  • The qualifying period for claiming unfair dismissal will rise from one to two years.
  • Judges will be able to sit alone in unfair dismissal cases.
  • Witness statements can be provided in writing as opposed to the current rules where a witness reads their own statement out aloud.
  • The maximum level for costs awarded to businesses winning a vexatious tribunal claim will rise from £10,000 to £20,000. Deposit orders required by claimants when a judge determines that a part of claim is unmerited will increase from £500 to £1,000.

The Government has also announced its intention to publish the average value of awards and time taken to reach a hearing. Included in the guidance for tribunal application and response forms, this information will provide all parties with a greater understanding about what to expect from the tribunal process before they enter the system.

Small businesses are looking to employ in the coming months as small business confidence picks up after a quarter of shedding staff, new figures from the Federation of Small Businesses (FSB) show.
Figures from the FSB's ‘Voice of Small Business' Index shows a net balance of 8.1% of small firms laid off staff in the three months to February – the highest figure since the survey began, in some cases partly due to rises in wages rises eating into 28.2% of firms margins.
Though hiring intentions among small firms may be picking up, unemployment is still set to rise this week – especially youth and female unemployment.

The FSB is calling on the Government to help small firms take on staff in the Budget later this month to help stem rising unemployment by putting measures in place, such as:

  • Increasing the National Minimum Wage for apprentices to £123 per week – eight in ten small firms have said they would support a rise in apprenticeship wages.
  • Ensuring Work Trials are made available to all suitable candidates on demand with no complicated qualifying criteria.
  • Introducing fees for the majority of claimants at employment tribunals to reduce the number of serial claimants and speculative claims, or those which have little foundation.
  • Encouraging small businesses to offer jobs they place with Jobcentre Plus as a Work Trial opportunity.

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