The Government published the Employment Bill on Friday 7 December 2007. The main changes proposed that are relevant to employers are:-

Dispute Resolution

  • The existing statutory dispute resolution procedures and statutory dismissal and grievance procedures will be repealed. It will be possible for a dismissal to be unfair on purely procedural grounds, however, in such a case the award for compensation may be reduced or eliminated where it is shown that, even if a fair procedure had been followed, the employee would still have been dismissed.
  • The penalties for failure to comply with a statutory procedure will be replaced with an "incentive" to follow a recommended practice (normally the ACAS Code of Practice on disciplinary and grievance procedures). Where an employer or employee unreasonably fails to follow a relevant Code of Practice, the Tribunal will be able to increase or reduce any award to the employee by up to 25%. The notes to the Bill indicate that ACAS is substantially revising its Code of Practice for reissue at the time the Bill comes into force.
  • The determination of proceedings will be possible without a hearing where all the parties consent or where each party is given the opportunity to request a hearing.

ACAS Conciliation

  • Where a person claims he could bring proceedings but has not yet done so his duty to conciliate will be replaced with a discretionary power to conciliate. This will allow ACAS to prioritise cases where the demand for conciliation exceeds resources and to relieve ACAS of the obligation to offer conciliation in pre-tribunal disputes where there is no prospect of success.
  • Where an employee has not yet instituted an unfair dismissal claim, their duty to seek re-instatement or re-engagement as part of the conciliation process, will be replaced with a discretionary power to seek reinstatement or re-engagement in pre-tribunal disputes.
  • The fixed conciliation periods are removed.

Unlawful Deductions from Wages

  • In claims relating to unlawful deductions from wages or non-payment of redundancy payments, the tribunal will be able to order the employer to make a compensatory payment to reflect any financial loss suffered by the employee, which is attributable to the employer's default (e.g. additional bank charges or interest). This will simplify the enforcement process for employees, who will be able to recover the full extent of their loss in the Tribunal rather than having to claim the additional losses in the county court (or sheriff courts).

National Minimum Wage (NMW)

  • The current enforcement and penalty notices will be replaced with a new method of calculating arrears and employers who have not complied with NMW requirements will be issued with a single notice of underpayment.
  • A new civil penalty will be introduced that can be levied against all non-compliant businesses and will be included on the single notice of underpayment issued.
  • Civil enforcement powers and criminal investigative powers available to officers enforcing the NMW will be increased.
  • Offences under the National Minimum Wage Act will be each way offences (capable of being tried in a Crown Court (with unlimited fine) or a Magistrates' Court).
  • Cadet Force Adult Volunteers are not entitled to the NMW.

Employment Agencies

  • The employment agency standards enforcement regime is to be amended by making offences under the Employment Agencies Act 1973 each way offences" and conferring additional inspection powers on the Employment Agency Standards Inspectorate.
  • In Scotland, individual partners (as well as the partnership) will be prosecuted where offences under the Act have been committed by a partnership and any of the partners are culpable.

Trade Union Membership

  • Trade union membership law will be amended to ensure UK compliance with the European Court of Human Rights ruling in Aslef v UK. In this case the trade union had a policy to prohibit members of the British National Party (BNP) from belonging to its union. An Employment Tribunal upheld a complaint by a union member who was expelled for being a member of the BNP. The union then complained to the European Court of Human Rights, which found that, in being prevented from expelling a member on grounds of political party membership, the union's Convention right of association had been infringed.
  • The amendments proposed will enable trade unions to apply membership rules that prohibit individuals who belong or who have belonged to a particular political party from membership of the trade union.


  • There is nothing in the Bill or accompanying press release to say when this Bill is expected to come into force. The DBERR states on its site that the aim is to receive Royal Assent by summer 2008. Given the expected changes to secondary legislation, further consultation and new guidance required, the date of implementation may well be April 2009 but we will have to wait for further guidance on this point.