By now, anyone with a passing interest in employment law will have noticed that the Government have published a (mildly amended) version of the Beecroft report, which purports to be a charter for business growth but has instead has been given the sort of reception normally reserved for neo-Nazi political tracts and people who steal sweets from children. Slightly confusingly, the Government also published the Enterprise and Regulatory Reform Bill at the same time, which proposes a number of amendments to employment law similar to ‘Beecroftian’ ideals.
The Government has made it clear that it wishes to ‘cut red tape’ and reform employment law to ease the burden on businesses. However, although the reforms proposed by the Bill may at first glance achieve this aim, the actual effect may be significantly different. Let’s look at each proposed reform in turn:
This would add a four-step procedure to the Employment Tribunal process prior to a claim being issued. In brief, ACAS would be obliged to promote a settlement within a certain period. If that fails then a certificate will be issued entitling the claimant to bring ET proceedings. Time limits for bringing claims would also be adjusted as part of this process, with the ‘period of conciliation’ not counting towards any limitation period, unless the limitation period expires during the period of conciliation, in which case a claimant has one month from the end of the conciliation within which to bring a claim. Got it? Reducing red tape, remember ….
On the face of it, this seems sensible. However, given that ACAS are not able to offer advice on the merits of any claim, and tend to act as little more than a ‘post-box’ for settlement offers, one wonders how this will work in practice. It seems unlikely that many parties will wish to settle at such an early stage when the full facts of the case are unlikely to be known. The process may encourage spurious applications to ACAS for pre-claim conciliation despite possible jurisdictional bars such as insufficient length of service, not being an employee, etc., and lead to reams of satellite litigation about the operation of the procedure itself, just as with the well-intentioned but totally unworkable and unlamented statutory disciplinary and grievance procedures.
The most controversial of all of the proposed amendments, this suggests capping the unfair dismissal award either somewhere between roughly £26,000 and £78,000, or at 52 or more weeks’ salary (which may or may not be capped at the statutory maximum of £430 per week), or the lower of the above amounts. Interestingly, different amounts may be specified in relation to ‘employers of different descriptions’. The reality is that there is no clear proposal here – that makes the consultation more or less meaningless and useful comment difficult. Devil, meet Detail.
A new requirement will be added that, in order to rely on a protected disclosure, a whistle-blower must have made a disclosure in the ‘public interest’. This amendment is an attempt to stop employees mentioning a real or perceived breach of their own contract to their employer, then relying upon that as a protected disclosure to avoid the cap on unfair dismissal awards. At present the only place where those words appear in the Public Interest Disclosure Act is in its title, so this would be a positive move.
And, finally, the amendment that you have all been waiting for, one that will have a seismic impact upon the employment law and HR community within the UK. Compromise Agreements are being renamed ‘Settlement Agreements’. Why, or what is expected to be achieved (other than a wholesale renaming of precedent banks and websites across the UK), no-one exactly knows, but this amendment at least is unlikely to lead to any further litigation if passed.
If it seems to you, having read this, that these amendments are a confused hodge-podge of half-finished ideas which will likely make little or no difference, apart possibly from increased legal fees, then we’d probably agree with you. Perhaps unsurprisingly, as lawyers, we have never really bought into the argument that there is “too much” employment law and that this is stifling business or allowing weak employees to prosper. In our experience, provided that poorly performing employees are appropriately managed using the proper procedure, Tribunal claims (and, dare we say it, lawyers’ fees) are relatively easily avoided.