A new Employment Bill has now been published. We reported on this in July 2007 under its previous title of the Employment Simplification Bill. When passed into law it will become the Employment Act. While it could conceivably be in force around October 2008, its implementation is more likely at present to be April 2009.

The new Employment Act will repeal the Statutory Dispute Resolution Procedures (“SDRP”) that came into force in October 2004. Currently, a failure to follow the SDRP renders a dismissal automatically unfair. The new legislation will repeal this concept.

Before the SDRP, the leading case of Polkey v A E Dayton Services Ltd provided that a dismissal can be unfair purely on procedural grounds, but that if a Tribunal is satisfied that if procedures had been followed properly a fair dismissal would have ensued in any event, then the compensation payable will be limited.

Currently any compensation awarded can be marked up by up to 50% if employers fail to comply with the SDRP, or indeed reduced by up to 50% if, alternatively, employees fail to comply with those procedures. It is intended that the incentive to complete satisfactory procedures will be retained in the new Employment Act. The current draft legislation provides for increases or decreases in compensation by up to 25% for failure to comply with the ACAS Code of Practice on discipline and grievance procedures. As the current ACAS Code relates to the SDRP a revised Code can also be expected.

The SDRP were introduced at the same time as the introduction of fixed ACAS conciliation periods. The new Act will repeal these fixed conciliation periods too. Contrary to what was intended, the absence of the services of an ACAS conciliation officer, for instance after 13 weeks from the start of an unfair dismissal case, has tended to mean that cases do not settle earlier, and that when they do it is at a greater cost to both employers and employees.

The proposed legislation will also introduce unlimited fines for failing to pay the National Minimum Wage and for certain employment agency offences.