New proposals to streamline employment law will boost business
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14 September 2012 - BIS
New steps to give firms more
flexibility and confidence in managing their workforce and to reduce
employment law red tape, were announced today by Business Secretary
Vince Cable. They are most likely to benefit small businesses.
Today’s package comes in response to calls from business to
simplify and speed up the process of ending the employment relationship
when it breaks down, for the benefit of both employers and employees.
The Government has given details of:
- its support for settlement
agreements to help end employment relationships in a fair and
consensual way. A consultation on how best to make this work in
practice starts today and Acas has agreed to provide a new code of
practice
- how it might reduce the
cap on compensation for unfair dismissal claims
- proposals to streamline employment
tribunals by making it easier for judges to dismiss weak
cases
- responses to its call for
evidence on the TUPE rules, when staff transfer to a
new employer. Government has heard that businesses want this to be more
efficient, and will consult on specific proposals before the end of the
year, and
- recommendations on how to
improve guidance for small businesses on the Acas code of
practice on discipline and grievance.
The Government also responded formally to the call for
evidence on proposals for compensated no fault dismissal for
micro-firms. Based on the evidence presented by business the Government
will not be taking forward the proposal.nofollow
The UK has a lightly regulated, flexible labour market that the OECD
considers to be amongst the best in the world, behind only USA and
Canada. The recent World Economic Forum Global Competitiveness Report
cited the flexibility of the UK’s labour market as one of the main
reasons for its improvement in the global rankings to 8th
from 10th.
But the Government has committed to look at ways to make it more
responsive to businesses through a parliament long review of employment
law, in conjunction with the Red Tape Challenge on employment law, with
the aim of clearing away unnecessary and complex regulation that has
damaged flexibility, created perverse incentives, increased business
risk and unnecessary administration.
Business Secretary Vince Cable said:
"We have been looking across the range of employment laws with a view
to making it easier for firms to hire staff while protecting basic
labour rights.
“Our starting point is that Britain already has very flexible labour
markets. That is why well over one million new private sector jobs have
been created in the last two years, even when the economy has been
flatlining.
“But we acknowledge that more can be done to help small companies by
reducing the burden of employment tribunals, which we are reforming,
and moving to less confrontational dispute resolutions through
settlement agreements."
The Government is already delivering significant reforms of employment
law, including extending the period for eligibility for unfair
dismissal from one to two years, encouraging more effective ways to
resolve disputes and thereby reduce the number of employment tribunals,
creating a universally portable Criminal Records Bureau (CRB) check and
removing the default retirement age. The Government has considered, or
is already taking forward, 80 per cent of proposals from Adrian
Beecroft’s report on employment law, published earlier this year.
Notes
1. The Coalition Government started a systematic review of
employment law in 2010. This Employment Law Review (ELR) is now half
way through its work and aims to provide clarity, certainty and give
businesses the confidence to manage their workforce effectively. The
Review sits alongside the Employment Law-related Red Tape Challenge to
reduce regulatory burdens on business.
2. The package of employment reforms announced today includes:
- settlement agreements consultation
starting today that will set out how the process will work in practice.
The consultation provides a template letter and guidance on how
employers and employees would reach agreement. Acas has also agreed to
provide a new code of practice for settlement agreements.
- unfair dismissal claims consultation
that will also start today and will look at the potential for reducing
the compensation cap, currently at Ł72,300. The two proposals are a cap
of up to 12 months pay and a new, reduced, upper limit.
- further streamlining of employment tribunals, following
on from Justice Underhill’s review, with a consultation starting today
including proposals on how judges could dismiss weak cases more easily
and reduce the number of preliminary hearings;
- a summary of responses to the call for evidence on changes
to TUPE with a commitment to consult on issues,
raised by business, by the end of the year; and
- a formal response to the call for evidence on proposals for
compensated no fault dismissal for micro-firms
and the Acas code on discipline and grievance.
Based on the evidence presented by business the Government will not be
taking forward the proposal on no fault dismissal, but will work with
Acas to make the guidance to their code more accessible, especially for
small businesses.
3. BIS published the report commissioned from Adrian Beecroft
in May this year, alongside an analysis of the report’s recommendations
and whether they are currently being considered or taken forward by
government. The report and analysis can be found here: www.bis.gov.uk/news/topstories/2012/May/ministerial-statement-on-beecroft-employment-law-report
4. In line with the introduction of employment tribunal fees next year,
the Government will extend the current HM Courts & Tribunals
Service system to protect access to justice for those who cannot afford
to pay the fee. Given the concerns raised by business respondents to
the employment tribunal fees consultation the Government will undertake
a review of remissions as part of a wider review required for the
introduction of Universal Credit. The review will aim to produce a
single remissions system for courts and tribunals which is simpler to
use, more cost efficient and better targeted those who can afford to
pay fees do so, while continuing to provide access to the courts and
tribunal system to those who cannot.
5. The Red Tape Challenge was launched by the Prime Minister in April
2011 and is systematically examining some 6,500 substantive regulations
that the Government inherited with the aim of scrapping or
significantly reducing as many of them as possible. It gives business
and the public the chance to have their say, by theme, on the
regulations that affect their everyday lives. It has also asked the
public what red tape holds back Disruptive Business Models and Civil
Society Organisations. The Government announced on 10 September 2012
that at least 3,000 of the regulations examined will be scrapped or
reduced. More information on Red Tape Challenge is at www.redtapechallenge.cabinetoffice.gov.uk.
6. The Government's economic policy objective is to achieve 'strong,
sustainable and balanced growth that is more evenly shared across the
country and between industries’. It set four ambitions in the ‘Plan
for Growth’ (PDF
1.7MB), published at Budget 2011:
• To create the most competitive tax system in the G20
• To make the UK the best place in Europe to start, finance
and grow a business
• To encourage investment and exports as a route to a more
balanced economy
• To create a more educated workforce that is the most flexible in
Europe.
Work is underway across Government to achieve these ambitions,
including progress on more than 250 measures as part of the Growth
Review. Developing an Industrial Strategy gives new impetus to this
work by providing businesses, investors and the public with more
clarity about the long-term direction in which the Government wants the
economy to travel.
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2012-09-17 09:30:37 in Employee Articles
