The Department for Business, Innovation and Skills has announced "the most radical reform to the employment law system for decades". The reform was outlined by Vince Cable, Business Secretary, in his speech to the Engineering Employers' Federation on Wednesday, 23 November 2011.

Mr Cable announced that the Coalition Government was "knocking down the barrier" that many employers feel current employment law presents to business growth. He went on to emphasise that the proposals "strike an appropriate balance" between the flexibility that employers require and the fairness and protections that employees rely on.

As part of this reform process, the Coalition Government will launch calls for evidence on:

  • The proposal to introduce "compensated no fault" dismissals for firms that have fewer than ten employees. 
  • The proposal to slim down and simplify the existing dismissal processes. This could include changing the Acas Code, or introducing supplementary guidance for small businesses. 
  • The consultation rules for collective redundancies and whether the current 90 day minimum period for more than 100 redundancies can be reduced. 
  • The proposals to simplify the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations.

In addition, as part of its 'Red Tape Challenge' the Coalition Government will:  Close the whistleblowing "loophole" so that a disclosure in relation to breach of an employee's own contract of employment will no longer constitute a protected disclosure. 

  • Consult, through the Ministry of Justice, on the introduction of fees for anyone wishing to take a claim to an employment tribunal, with two proposed options:
    • Payment of an initial fee to lodge a claim, and payment of a second fee to take the claim to a hearing: or 
    • Payment of an initial and second fee as described above, but with a threshold such that only those seeking an award of more than £30,000 will pay any fees (and these fees will be proportionately higher). 
  • Create a universally portable CRB check that can be viewed by employers instantly online, from early 2013.

Finally, as part of the response to the 'Resolving Workplace Disputes' consultation, the Coalition Government intends to: 

  • Increase the qualification period for unfair dismissal from one to two years, from April 2012. 
  • Require all employment disputes to go Acas for pre-claim conciliation before going to a tribunal.
  • Consult on 'protected conversations' which will allow employers to discuss issues like retirement or poor performance in an open manner with staff - without this being used in any subsequent tribunal claims. 
  • Appoint Mr Justice Underhill to lead an independent review of the existing rules of procedure governing employment tribunals. This review will look to address concerns that they have become increasingly complex and inefficient over time and are no longer fit for purpose.
  • Consult further on measures to simplify compromise agreements, which will be renamed 'settlement agreements'.
  • Announce plans – which would then be the subject of consultation – to consider how and whether to develop a 'rapid resolution' scheme which will offer a quicker and cheaper alternative to determination at an employment tribunal.
  • Modify the formulae for up-rating employment tribunal awards and statutory redundancy payments to round to the nearest pound.

There are likely to be further interesting developments in the forthcoming months, and we will keep you updated as and when they arise.