Update on Reform of Employment Legislation

The Government has an ongoing commitment to reduce the “red tape” faced by businesses in an effort to stimulate economic recovery.  This includes reviewing the existing employment legislation.  Over the past year, the Government has announced a raft of proposals that it is considering including the introduction of “no-fault compensated dismissals” which would have enabled very small businesses to make a payment to an employee whose employment was not, for whatever reason, working out in order to secure the fair termination of their employment.  After consulting on this particular proposal, the Government has found that there is little support for it from the business community and so it has now decided not to take it any further. 

Two new consultations were launched last week looking at 1) the introduction of settlement agreements (which would appear to essentially be standardised compromise agreements)and the maximum level of compensation in a successful unfair dismissal claim and 2) the effectiveness of the Employment Tribunal systems and ways in which weak claims could be disposed of at any early stage.  Both consultations are open until 23rd November 2012.  Collective redundancies and TUPE have also come under scrutiny recently with the response to the consultation on TUPE being published last week.  Employers suggested a number of improvements to TUPE including a requirement to provide Employee Liability Information earlier than 14 days prior to the transfer date and the provision of guidance on what exactly constitutes a “economic, technical or organisational” reason.  The responses to this consultation are now being considered by the Government.

The ongoing consultations and the recent consultation responses are available at www.bis.gov.uk.

For more information please contact Martin Sinclair or Nicola Gray or call 01224 632 464.