The Enterprise & Regulatory Reform Bill
This Bill was laid before Parliament in June and covers a variety of employment-related legislation, some of which resulted from the “Red Tape Challenge” which was intended to remove unnecessary regulation. So what is it likely to do?
MANDATORY ACAS CONCILIATION
The intention is for claimants to be required to submit claims to Acas before issuing tribunal proceedings and the time limits for lodging claims will be extended to allow time to reach a settlement between the parties. The service will be called “Early Conciliation” and is expected to be introduced in April 2014.
CAP ON UNFAIR DISMISSAL AWARDS
The current maximum unfair dismissal compensatory away is £72,300. The Bill will allow the Secretary of State to introduce a new cap of between one and tree times the median annual earnings (this is likely to be between £26 and £78k.) However, this would require secondary legislation. It is not entirely clear yet what levels would be chosen, but it does allow the amount to be set so that it may be lower for smaller businesses.
FINES FOR EMPLOYERS WHO LOSE TRIBUNAL CLAIMS
The Bill allows employment tribunals to impose fines on employers who lose claims where there are “aggravating” features (e.g. situations involving malice or unreasonable behaviour on the part of the employer.) This additional penalty could be as much as 50% of any financial award made to the employee and could be between £100 and £5,000 with a discount for prompt payment.
SETTLING FOR A COMPROMISE?
Compromise agreements are to be renamed “Settlement Agreements” and intended to be simpler than the existing documents in the hope that more employers will use them before formal disputes develop. It is expected that the proposals for settlement agreements will tied into the no-fault dismissal and protected conversation ideas outlined in the Beecroft Report. We will have to wait for the consultation documents to be published to see the details of the proposals.
The Bill is now starting its journey through Parliament and is not expected to become law until October 2013 at the earliest.
Posted on 19 Nov 2016