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Further plans by the Government to provide businesses more flexibility through changing employment laws

I know it may only seem as though it was yesterday that I was informing everyone on the consultation about the employment tribunal but I can assure you that it was last month! So I thought for those of you who are following the reforms I would provide you with a short summary of the proposal by Business Secretary Vince Cable on 14 September. He announced further steps to reduce employment law in his vision to give business owners/managers more flexibility in managing their workforce.

The package put forward on the 14 September 2012 came from the response from businesses to speed up the process for ending an employment relationship (for both employer and employee) when it breaks down (if you have not been following the employment law reforms you may find it useful to read the following blog posts http://www.scesolicitors.co.uk/news/consultation-on-charging-fees-in-the-employment-tribunalhttp://www.scesolicitors.co.uk/news/employment-proposes-to-help-economical-growth-updatehttp://www.scesolicitors.co.uk/news/the-queens-speech-2012-the-effects-on-employment-law and http://www.scesolicitors.co.uk/news/update-on-the-employment-law-reforms).

The Government detailed:

1. Support for ‘settlement agreements’ – which are to be used to end employment relationships in a fair and amicable manner. A consultation on how to make this work in practice started on 14 September and ACAS has agreed to provide a new code of practice. The current practice is to enter into ‘compromise agreements’ and it is anticipated that settlement agreements will be very similar.

2. How they may reduce the cap on compensation for unfair dismissal claims – currently the cap is £72,300.

3. Proposals to streamline employment tribunal claims by making it easier for judges to dismiss weak claims and in effect reduce preliminary hearings. Again a consultation in respect to how this would be undertaken in practice started on 14 September.

4. The responses to its call for evidence on TUPE rules, when staff transfer to a new employer. The Government heard that businesses want this to be efficient and will consult further towards the end of the year. Unfortunately the Government is restricted in terms of amending the statute; however they will look at providing further guidance.

5. Recommendations on how to improve guidance for small businesses on the ACAS code of practice on discipline and grievance. The Government will not be taking the proposal for ‘no fault dismissal for micro-firms’. For those of you who are not familiar with this proposal, it allowed businesses with fewer than 10 employees to dismiss an employee where no fault was identified on the worker’s part, by paying a set amount of compensation.

No one yet knows whether the reforms will decrease the current number of claims that are lodged in an employment tribunal but I suppose the Government feel that something has to be done particularly in the current economic down turn. I will keep you posted on further developments!


Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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