Background

The new Employment Bill, which was published on 6 December 2007, received its second reading in Parliament on 8 January 2008. The Bill aims to strengthen the enforcement of employment law by reducing regulatory burdens on employers, whilst also increasing protection for vulnerable workers.

New legislation

One of the principal elements of the Bill is that it proposes to repeal the statutory dismissal and grievance procedures set out in the Employment Act 2002 and the Employment Act 2002 (Dispute Resolution) Regulations 2004 and related provisions on procedural unfairness in the Employment Rights Act 1996, including section 98A, which states that a dismissal is an automatically unfair dismissal if an employer has failed to comply with the statutory dismissal procedures. It proposes to give employment tribunals discretion to increase compensation awards made to employees by up to 25% where an employer has unreasonably failed to comply with an applicable ACAS Code of Practice and to reduce any award to an employee by up to 25% if it considers that the employee has unreasonably failed to comply with the Code. Other changes proposed include the introduction of a “fast-track” process in the Employment Tribunal, the abolition of fixed conciliation periods in Tribunal cases, strengthening the current regime for enforcement of national minimum wage legislation and improving the enforcement of employment agency standards.

Effect on employers

Probably the most significant of the changes proposed in the Bill is the repeal of the statutory dispute resolution procedures after only a short period in force (they were introduced in 2004). This will come as a relief for many employers, as the current procedures, in particular the statutory grievance procedures, have given rise to much confusion. However, the repeal is unlikely to take effect until April 2009, so in the meantime employers will need to continue to follow the current procedures. When it does eventually come into force, the new regime will not relieve employers of their obligation to try and resolve disputes fairly and reasonably. An employer’s compliance with the ACAS Codes of Practice on disciplinary and grievance procedures is likely to have a significant bearing on the amount of compensation awarded to an employee in a successful claim. The Codes of Practice on disciplinary and grievance procedures will be revised to coincide with the new regime and employers will need to familiarise themselves with these.