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Government Shake Up

Vince Cable and the government have today announced a shakeup of employment legislation. The key points of interest are:

Unfair dismissal qualifying period to increase to two years from April 2012. This will be welcomed by many employers. However there are a number of claims that can be brought with less than two (presently one) years and employers would be wise to always follow at least a basic fair procedure before dismissing.

Compulsory lodging of all claims through Acas. The idea is that the parties will be made to talk to each other and hopefully resolve their differences without recourse to legal proceedings. This has to be a good idea. However the proof of the pudding is in the eating and the 2004 regulations which obliged employees to exhaust internal grievance and disciplinary procedures before issuing proceedings were abandoned when they did not work.

Consultation on the introduction of ‘protected conversations’ with older workers on their planned retirement age and performance problems. However it appears that this will not protect against discriminatory comments by employers, and the general advice to employers is likely to be don’t say anything that you would want to avoid coming out in a Tribunal hearing.

Currently if you are making fewer than 20 redundancies, then the whole process of consultation etc can be done in as quickly as a week or 10 days. There are however longer compulsory redundancy consultation periods if making more than 20 people redundant in a 90 day period. Apparently the government will be consulting on reducing that obligatory consultation period for larger employers. This will be welcome news for bigger employers trying to make large number of redundancies in a hurry.

Employer organisations are likely vigorously oppose the proposal to impose financial penalties against employers who breach employment rights, payable to the Exchequer. These fines will be payable at the discretion of Employment Judges, subject to a discretion exercisable by Employment Judges. It is hard to see what the point of this proposal is. If the intention is to discourage employers from breaching employment legislation in the first place, then one would think that losing a Tribunal claim was already incentive enough.

Other plans include a rapid resolution scheme to resolve simple claims within 3 months, and Judges sitting alone in unfair dismissal claims, which may result in more cases being decided in favour of employers.

The government is also thinking about the possibility of no-fault dismissals for micro-businesses.

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