Employment Changes

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Employment law – the government’s proposed changes to create jobs

The Business Secretary, Vince Cable, has recently announced the government’s plans for employment law reform with the declared intention of clearing away “the structural barriers to economic growth” to give employers “the confidence to take on new workers” and “create new jobs”. His plans (if they become law) could have a considerable impact on employers and employees alike. The key will be striking the right balance.

Any business, especially smaller ones which cannot afford to have a dedicated human resources department, will know that hiring, managing and dismissing staff is complex, time-consuming and expensive of both time and money. The government’s stated aim is to reduce the red tape so that businesses are freed to run and grow their businesses.

While the government says that their proposals should encourage economic growth, it is clear they also aim to save public money by, for example, introducing for the first time the payment of fees for bringing a case in the employment tribunal and discouraging tribunal claims altogether by promoting the resolution of disputes through mandatory conciliation first. This will increase the role of ACAS (the Advisory, Conciliation and Arbitration Service).

Some of the government’s specific proposals are:

• to increase the qualifying period of continuous employment for unfair dismissal claims from one year to two;

• to consult about the introduction of “protected conversations” to allow employers to talk openly with their staff about workplace issues without fear that those conversations will later be used in evidence in the tribunal (unless they amount to discriminatory acts);

• not only to make the lodging of claims through ACAS compulsory, as described above, but also to introduce the option of a “rapid resolution scheme” to sort out more quickly and cheaply smaller, more straightforward employment issues such as disputes over holiday pay;

• to undertake a “root and branch review” through Mr Justice Underhill of the rules governing tribunals to streamline the system and deliver reforms “that meet the needs of an economy which is striving to recover and grow”;

• to introduce fees for tribunal claims subject to a remissions system “for those who need help”;

• to consult generally and to work with ACAS to find ways of radically slimming down the existing dismissal processes to make them simpler and less bureaucratic, quicker and clearer but at the same time giving poorly performing employees due warning while ensuring employers have the flexibility to manage staff who are not performing adequately despite warnings;

• to call for evidence on how to simplify the current law relating to employees’ rights where there are business transfers and service provision changes under TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006), so that employers can more easily restructure their businesses but at the same time provide “appropriate levels of protection to employees”;

• to look into the rules relating to collective redundancies to see whether the current statutory 90-day consultation period can be reduced;

• from 2013, to make available online updated CRB checks on employees so that it will no longer be necessary to get fresh clearance every time a person changes jobs.

The above list is not exhaustive. There are other changes to employment law in the pipeline. The devil will no doubt be in the detail when the changes actually become law. For example, what will be the qualification criteria for a remission on fees given that most people who have just lost their job are likely to be financially stretched? Will ACAS be given the resources to take on what is likely to be a heavier burden than the one it has at the moment?

As with most changes of this kind, there are bound to be anomalies and ambiguities which will lead to the need for legal advice. Whether you are an employer or an employee, if you require help with any employment issues either now or after the government changes have been introduced, contact Stephen Watmore  in our Employment department for advice.

This article should not be taken as a full statement of the law. It should be regarded purely as guidance and is no substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be accepted by Wiseman Lee LLP. © Wiseman Lee LLP 2011

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