Reform or Regression: Government announces radical employment law reforms
Finally, after many months of rumour and leaks to the press, Business Secretary Vince Cable has today announced the government's proposals for what is claimed to be the most radical reform of employment law for decades.
The main proposals are:
- from April 2012 an employee will need to have at least two years’ service to be able to bring a claim for unfair dismissal. (The current required length of service is one year)
- all claims will have to go through Acas, for an attempt at mediation, before they can be lodged with an employment tribunal
- compromise agreements will be renamed “settlement agreements” and the process will be simplified, including a minimum agreed amount where parties agree a mutual termination of employment
- the idea of protected conversations has been raised for consultation. The purpose of a protected conversation would be to allow employers to have frank discussions with staff without fear that they could be used as evidence in a tribunal (a bit like a “without prejudice “conversation)
- a call for evidence, with a view to consultation, on whether or not the minimum consultation period for collective redundancies (which is currently 90 days) is restrictive to employer flexibility and whether or not it should be reduced
- options for a 'rapid resolution scheme', to enable simple claims to be settled within three months
- financial penalties for employers who breach employment rights, payable to the Exchequer, subject to a discretion exercisable by Employment Judges
- maternity and paternity leave to be 'modernised', with emphasis on greater involvement for fathers
- there will be a consultation on the introduction of tribunal fees. The consultation will set out two proposals : (i) employees pay an initial fee to lodge a claim and a second fee to take the claim to hearing or (ii) introducing a £30,000 threshold so those seeking an award above this level will pay more to bring a claim.
These proposals will no doubt be welcomed by employers. The TUC has criticised them, arguing that they will create a “hire and fire culture” and make it even harder for workers with genuine cases of victimisation, bullying and unfairness at work to bring a claim. Announcing the changes Cable, however, denied that they would dilute workers rights saying, “Our proposals strike an appropriate balance [between the interests of employers and employees] and we are keeping the necessary protections already in place to protect employees. Our proposals are not - emphatically not - an attempt to give businesses an easy ride at the expense of their staff.”
What comes next remains to be seen; we shall have to wait to see the response to the consultation on these proposals.
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