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Subscribe to this list via RSS Blog posts tagged in Unfair Dismissal

Plans for a new kind of employment contract called an ‘employee-owner’ were announced at the Conservative Party Conference earlier this week.

The scheme will involve the new employee-owners exchanging some of their UK employment rights for rights of ownership in the form of shares in the business they work for. Any gains earned on these shares will then be exempt from capital gains tax.

The Government is going to consult on the new contract later in the month, but in very general terms it will see employees given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, they will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required to provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual eight.

The Government plans to draft legislation to bring in the new employee-owner contract later this year so that companies can use the new type of contract from April 2013. 

Responding to the Second Reading of the Enterprise Bill in the House of Commons, Citizens Advice Chief Executive Gillian Guy said:

“We warmly welcome and support some of the changes in this bill that will make it harder for rogue employers to get away with treating people unfairly at work. Most employers behave responsibly, but we still see far too many cases where people are unfairly dismissed or denied their basic workplace rights.

“We’re very pleased that the government has taken up our suggestion to deal with straightforward cases - such as non-payment of holiday pay - more quickly and simply, without the need for an employment tribunal hearing.

“It’s important that rogue employers don’t profit at the expense of decent bosses, so we very much welcome financial penalties for employers in cases where there are ‘aggravating features’, such as those involving rogue employers who don’t engage with the Employment Tribunal process.

“There is one important element missing from a Bill that aims to improve the Employment Tribunal system – namely measures to ensure more effective enforcement of unpaid Employment Tribunal awards and Acas settlements. This Bill provides an opportunity to finally close a loophole that allows some rogue employers to profit from exploitation with impunity. This is grossly unfair not only to those workers who do not receive the compensation due to them, and to the taxpayers whose taxes have paid for employment judges to determine the claim to no end, but also to the vast majority of law-abiding employers.”

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.

Government plans to enable micro firms to dismiss employees without good reason risks creating a perverse barrier to economic growth by discouraging small businesses from hiring more workers.

This is the view of the Chartered Institute of Personnel and Development (CIPD) in response to the call for evidence by the Department for Business, Innovation and Skills on proposals to introduce compensated no fault dismissals for firms with fewer than ten employees.

Under a system of compensated no-fault dismissals, businesses with fewer than ten employees (known as micro businesses) would be able to dismiss a worker, where no fault had been identified on the part of the employee, with the payment of a set amount of compensation.

Mike Emmott, employee relations public policy adviser at the CIPD, said:

“There is no economic case to be made for the watering down of employment rights for businesses of any size. Businesses have far more to lose in lost productivity from a de-motivated and disengaged workforce than they stand to gain from the ability to hire and fire at will. The consequences for the UK’s economic growth could prove particularly perverse when it comes to micro-businesses, who may be discouraged from hiring their tenth worker and may even struggle to recruit high calibre employees because they are seen as low-road employers.”

Call for Evidence on dismissal

Posted by on in Dismissal

Proposals to examine the current dismissal process have been announced by the Government with the publication of a Call for Evidence.

Through the Call for Evidence, the Government is seeking to establish a strong evidence base on the current understanding of the dismissal process, including awareness, understanding and use of the Acas Code of Practice on Discipline and Grievance. The Government will be seeking the views of employees, business organisations and all other interested parties.

The Government has also published the Employment Law Review annual update in the Houses of Parliament, outlining how the review has been taken forward. The report summarises the current programme and looks ahead to further areas it is considering as part of the Review.

In addition, it was also announced that the Employer’s Charter, first published in January 2011, has been updated to include pointers on sickness absence and recruitment. The Charter aims to counter the misconception that employment protections are all one-way - towards the employee. It will give greater clarity to managers on what they can already do to deal with issues in the workplaces, on subjects such as performance, sick leave, maternity leave, requests for flexible working and redundancy.

The British Chambers of Commerce (BCC) has called for the government to do more to lift the burden of regulation on business.

Responding to the publication of the government’s Statement of New Regulation, John Longworth, Director General of the BCC, said:

“Although the costs faced by businesses have been reduced, the government has not gone far enough in terms of real deregulation in key areas such as employment. There is still a long way to go if ministers are to honour their pledge to be the first administration to leave office having significantly reduced regulation.

“Businesses tell us they are still not feeling the burden of regulation lifting. Although doubling the unfair dismissal qualifying period to two years will boost business confidence to hire, more changes are needed to create a hard-hitting and comprehensive deregulatory package.

“This includes reforming redundancy rules, introducing no-fault dismissal and tribunal fees and sufficient action to implement promised health and safety changes. Reforms to mitigate the effect of the removal of the Default Retirement Age must also be put in place. With unemployment so high, it is crucial that these changes are implemented without delay to give businesses confidence to invest and grow.

“The regulatory process must be made more robust and transparent, with the volume of proposals deemed out of scope through the One-in, One-out System reduced. Furthermore, the recommendations made by the Regulatory Policy Committee should be published so the government can be held to account for their promises. This will also help to prevent any single minister or department from creating burdensome and costly new red tape.”

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