By Anthony Korn

The Enterprise and Regulatory Reform Bill was introduced into the House of Commons on 23 May 2012. Anthony Korn reviews the proposed changes to employment law and employment tribunals.

The Bill includes nine clauses which are relevant to employment law practitioners. The changes may be summarised as follows:

Clause 7 inserts new Sections 18A and 18B into the Employment Tribunals Act 1996, the effect of which is that, other than in certain circumstances, a prospective claimant is required to submit details of a proposed claim to ACAS before the claim is presented to the Employment Tribunal. The Conciliation Officer will be required to try and achieve a settlement of the dispute within a prescribed period. If the Conciliation Officer concludes that a settlement is not possible, or the prescribed period expires, then the Officer must issue a certificate to the prospective claimant. A claimant will not be able to issue tribunal proceedings without such a certificate. The services of a Conciliation Officer will continue to be available to the parties after the designated period (as they are now). Clause 8 of the Bill provides for extension of limitation periods to allow for the compulsory conciliation process.

Clause 9 of the Bill amends Section 18 of the Employment Tribunals Act 1996 to enable the Secretary of State and the Lord Chancellor to add or remove proceedings from the list in Section 18(1) of the Employment Tribunals Act 1996.

Clause 10 is intended to support the introduction of a “rapid resolution” scheme for certain types of employment tribunal claim which are seen as “simple” or “low value”. It will allow the parties to opt for determination by a legal officer. This ties in with the existing power under Section 4 of the Employment Tribunals Act 1996 to appoint legal officers who will be competent to make determinations where the parties consent in writing the proceedings are of type identified by the Secretary of State by order.

Clause 11 deals with the composition of the Employment Appeal Tribunal. Under the new provisions, proceedings before the EAT are to be heard by judges sitting alone unless the judge directs otherwise. In those circumstances, the panel may include up to 4 “appointed” members.

Clauses 12 and 15 vary the existing provisions in relation to the annual review of employment protection payments including compensation for unfair dismissal. There is a power to increase or decrease the maximum compensatory award. There could be a lower maximum amount for smaller employers.

Clause 13 adds a new Section 12A to the Employment Tribunals Act 1996 and gives employment tribunals a discretion to impose a financial penalty on employers where there has been a breach of a worker’s employment rights and the tribunal considers that , in the circumstances, the employer’s behaviour in committing the breach had one or more aggravating features. The penalty cannot be less than £100 and not more than £5000. Interestingly the fine can be reduced by 50% if it is paid promptly (within 21 days of notification of the decision). Payment is to the consolidated fund rather than the Claimant.

Clause 14 amends Part IVA of the Employment Rights Act which deals with whistleblowing. It adds an additional requirement that any disclosure has to be in the “public interest”. This is intended to address the issue raised in Parkins v Sodhexo [2002] IRLR 109 where the EAT suggested that a breach of legal obligation could extend to a breach of contract. The concern is that this interpretation might extend whistleblowing protection to contractual disputes between employer and employee. The example given in the explanatory notes is a dispute over contractual holiday pay. The position may be different if the right was underpinned by statute, ie statutory holiday pay.

Clause 16 provides for the renaming of compromise agreements and compromise contracts which in future are to be called “settlement agreement”. There is also some suggestion that the conditions relating to such agreements may be further liberalised in the course of the parliamentary passage of the Bill.

The Government has also announced that it proposes to consult over changes to Section 187 and 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 which deals with collective redundancy consultation. In essence the Government is proposing to reduce the 90 day collective consultation period where a 100 or more employees are threatened with redundancy within a 90 day period to 45 days. The minimum 30 day period is to remain unchanged as will the 90 day protective award in the event of contravention of these provisions. The Government is also proposing to introduce a new non-statutory code of practice to encourage quality consultation. It is unclear whether these changes will be incorporated into the Bill.