Reforming employment law - fact or fiction?
13-06-12 9:30 BIFM
The recently published and previously leaked report on employment law reform by the Government’s red tape adviser, Adrian Beecroft, was said to be made ‘to dispel some of the myths’.
The Government immediately published a position statement setting out which recommendations it intends to take forward. You can access a digest which simplifies the report through its key recommendations provided by Workplace Law
, the employment law, health and safety, and environmental management specialists, and written by Mark Shulman - Consultant Solicitor at Keystone Law.
With the intention of dispelling ‘some of the myths’, the publication can be filtered down to the question of: what is fact and what is fiction?
The Government is taking forward several of the Beecroft Report recommendations but a number were not accepted which could affect you at the workplace.
The key recommendations to be taken forward by the Government include:
> Consultation on whether to abolish employers’ liability for third party harassment (introduced under the Equality Act 2010). These provisions extended employers’ obligations to prevent third party harassment of their staff and an employer who fails to do so can be taken to an Employment Tribunal.
> Consultation on no fault dismissals for micro businesses (i.e. with fewer than ten employees). Compensated no fault dismissals would allow employers to dismiss anyone without giving a reason, provided they make an enhanced leaving payment linked to the employee’s salary and length of service (like statutory redundancy payments). Currently, an employer must specify a reason for dismissal (such as redundancy, capability or conduct) and even under the new proposals; employees could make a claim for compensation if there is a dismissal involving discrimination or whistleblowing;
> The introduction of fees to pursue Employment Tribunal claims. The Government has already carried out a consultation on the introduction of Tribunals fees from 2013 and intends to respond further in due course.
> Removal of ‘gold-plating’ in TUPE transfers. The Government is currently considering the evidence it has received about the ‘gold-plating’ principle which applies when a group of employees is transferred to a new employer. The law does not allow their terms and conditions to be detrimentally changed because of an employment transfer and so it is harder for the transferee employer to reduce costs by downsizing the workforce or reducing the pay of transferred workers.
> A reduced consultation period of 30 days for collective redundancies regardless of the number of employees at risk. At present employers must consult with employees at risk of redundancy for 30 days before the first dismissal (where between 20 and 99 redundancies are proposed within a 90 day period), but for 90days if more than 100 people are to be made redundant within a 90-day period. TheBeecroft Report points out that this penalises larger businesses and imposes an extra cost of 60 days’ wages on any business wanting to make more than 100people redundant. The Government intends to consult on the Beecroft proposals for a standard 30-day redundancy consultation period.
Key recommendations not being taken forward include:
> A general exemption for employment law requirements for micro businesses (i.e. with fewer than ten employees). Apart from the proposal in relation to no fault dismissals described above, the Government does not plan to reduce red tape for small businesses by taking forward this recommendation.
> Legislation to ensure that Tribunals can further reduce unfair dismissal compensation. Currently, tribunal compensation for unfair dismissal comprises a basic award (based on the employee’s age, length of service and weekly pay), as well as a compensatory award (based on loss of earnings and other benefits). A basic award (unlike the compensatory award) still has to be paid even if the dismissal would not have been unfair had the correct procedures been followed. The Government’s position is that there are already powers for Tribunals to reduce a basic award of compensation and so further action is not needed.
> Capped awards in cases of discrimination. The Beecroft Report referred to the fact that compensation for discriminatory dismissal awards is uncapped. The Government’s response points out that it would be illegal under EU rules to introduce a compensation cap for such dismissals and so the Beecroft recommendation was not achievable.
Talk surrounding employment law issues is expected to carry on making headlines for the foreseeable future.