Government Announces ‘The Most Radical Employment Law Reform in Decades’

Vince Cable has announced the Government’s proposals to encourage growth and employment levels in the economy, in what is claimed to be the most radical reform of employment law in decades. The announcement was made just prior to the publication of the Government’s response to the consultation on ‘Resolving Workplace Disputes’, which sought views on how workplace disputes can be resolved at an earlier stage and how the tribunal service can be made as user-friendly and as effective as possible, and the Red Tape Challenge review of employment law, which had the aim of deregulating the bureaucracy that currently entrenches employment legislation.
Tribunals continue to be overburdened large numbers of claims and a number of the key proposals include reducing the number of tribunal claims and the costs associated with workplace disputes.  These include the compulsory lodging of all claims through ACAS for an attempt at conciliation before a claim can be lodged with the tribunal and considering options for a ‘rapid resolution scheme’ to enable basic straightforward claims (such as holiday pay) to be dealt with quickly and cheaply by legally qualified individuals on paper only (with no oral hearings). In addition, important changes will be introduced to the tribunal rules; such as increasing the level of deposit orders from £500 to £1,000, where an employment judge considers that all or part of a claim (or a response) has little reasonable prospect of success, increasing the level of costs that a tribunal can order a party to pay from £10,000 to £20,000 and allowing  employment judges to sit alone in unfair dismissal cases.
However, there are also some more controversial proposals which unions are arguing will erode fundamental employment rights. These proposals include increasing the unfair dismissal qualifying period from one year to two years, publishing a consultation on the introduction of fees for anyone wishing to take a claim to an employment tribunal and opening a consultation on the introduction of ‘protected conversations’, which will enable frank conversations between an employer and employee such as discussions concerning performance issues or retirement plans, at either party’s request, that will be inadmissible in future employment tribunal proceedings. 
Further reforms include a call for evidence on the option of compensated no-fault dismissals for small businesses (employing 10 or less employees). This stems from the recommendations in the leaked Beecroft report allowing small businesses to be able to dismiss employees without having to give a reason and by paying notice pay and a redundancy payment to the individual. Fierce opposition is expected in relation to this proposal.
There were also some proposals which were unexpected, including removing a loophole in the whistleblowing rules, so that complaints about a breach of an employee’s own employment contract will no longer be classed as a qualifying disclosure. The Government has also announced a call for evidence in relation to reducing the minimum periods for collective redundancy consultation where there are 100 or more redundancies from 90 days to a shorter period and simplifying the current legislation in relation to the transfer of undertakings.
The Government was keen to point out that it was not re-balancing employment law in the favour of employers and that the proposals sought to strike an appropriate balance between the rights of employees and the need for businesses to grow without fear that they will result in Tribunal claims.
The proposals have been welcomed by business groups including the CBI and British Chambers of Commerce.  The CBI stated that the Government has listened to their concerns about how employment law is acting as a barrier to creating growth and jobs.  However, trade unions reacted to the plans with anger and dismay.  Unite accused the Government of “removing long established rights at work, making dismissal easier, promoting a culture of fear in the workplace and creating a charter for rogue employers and bullies”.
There are obvious benefits for employers in the Government’s proposals, however, many of the headline grabbing aspects of the proposals are still in their early stages; further details of how the proposals will work in practice are eagerly awaited.