The government has proposed an amendment to the Enterprise and Regulatory Reform Bill to provide that an offer made or discussion held with an employee with a view to terminating employment by agreement cannot be taken into account in unfair dismissal proceedings. This rule could apply earlier than the current 'without prejudice' protection, which cannot be relied on until there is a live dispute. However, the proposal as drafted is unlikely to be particularly useful. No protection applies if an employee brings an automatically unfair dismissal or discrimination claim, and most employers are unlikely to be in a position to discount the possibility of such claims. Tribunals can also withdraw protection if anything is said or done which, in the tribunal's opinion, is "improper" - the term is not defined - or is connected with improper behaviour. The government has confirmed that the bill will not be amended to provide for compensated no-fault dismissals, as proposed in the Beecroft Report.

The government has announced that it is proceeding with its earlier proposal to give employment tribunals the power to order pay audits where an employer is found guilty of gender discrimination in relation to contractual or non-contractual pay matters.(1) Tribunals will not order audits where:

  • an audit has been completed in the past three years;
  • the employer has transparent pay practices; or
  • the employer can show good reason why an audit would not be useful.

Failure to comply with an order will give rise to a civil financial penalty. A second consultation will take place on the exact contents of equal pay audits, publication requirements (eg, whether this will be to the general public or to staff and staff bodies only) and other issues. Micro-employers will initially be excluded.

The government is consulting until September 19 2012 on proposals aimed at revitalising the collective redundancy rules.(2) The key suggested reform is to reduce the minimum period from the start of consultation to the dismissal taking effect where there are 100 or more proposed redundancies at one establishment. The current 90-day period could be reduced to 45 or 30 days. The potential penalty for failure to comply is to remain 90 days' pay in respect of each affected employee. A new non-statutory code of practice will provide guidance on issues such as the definition of an 'establishment', when consultation should start and what it should cover. Existing government guidance will be reviewed and updated. The interaction between the collective redundancy consultation rules and the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) is to be considered as part of the review of TUPE by the Department for Business, Industry and Skills, which is "operating to a longer timescale" than the review of the collective redundancy rules. Rumour has it that the government is considering the removal of the service provision change provisions in TUPE.

The department has also issued a call for evidence (closing on July 26 2012) on the European Commission's proposals for a Posting of Workers Enforcement Directive, which is likely to have an impact on businesses that employ posted workers or post workers to other member states and on workers posted to or from the United Kingdom, particularly those in the construction sector.(3)

For further information on this topic please contact Andrew Brown at Herbert Smith LLP by telephone (+44 20 7374 8000), fax (+44 20 7374 0888) or email ([email protected]).


(1) A copy of the consultation paper can be found on the Home Office's website.

(2) A copy of the consultation paper can be found on the department's website.

(3) Further details can be found on the department's website.