Employment law changes confirmed

The Government has confirmed plans to overhaul key areas of employment legislation, following a consultation and a review of employment law.

The proposals include some reforms that had been widely predicted such as changes to the dismissal system, which could result in organisations with fewer than 10 employees being free to use the “compensated no-fault dismissal” system.

The Government also says it will be looking at ways of “slimming down” existing dismissal processes and identifying ways in which they might be simplified. It has been confirmed that from April 2012 the qualification period for unfair dismissal will be increased from one to two years.

Previously announced changes to the employment tribunal system, which are claimed will deliver £40m per year in benefits to employers, are confirmed.  All employment disputes will be required to go to Acas for pre-claim mediation before proceeding to a tribunal.

The Ministry of Justice will publish a consultation on the introduction of tribunal fees to encourage users to “consider seriously the validity of their claim”.  The consultation will be concerned with two proposals –

There will also be a call for evidence on whether or not the 90-day minimum consultation period for collective redundancies should be reduced because it is restrictive to employer flexibility.

Vince Cable said: “Many employers still feel that employment law is a barrier to growing their business. We’re knocking down that barrier today – getting the state out of the way, making it easier for businesses to take on staff and improving the process for when staff have to be let go…. Our proposals are not – emphatically not – an attempt to give businesses an easy ride at the expense of their staff. Nor have we made a cynical choice to favour flexibility over fairness.

We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business. Tribunals should be a last resort for workplace problems, which is why we want disputes to be solved in other ways.”

Some of the proposed changes will require the Government to introduce primary legislation, subject to the Parliamentary timetable.

The full Government response to the consultation can be found on the BIS website.

Our Blog page covers this topic too.