News

The Employment Bill has been published and includes:

  • abolition and replacement of the statutory dispute resolution procedures;
  • removing fixed-conciliation periods (so Acas can conciliate for the whole period before a hearing);
  • financial loss award for unlawful deduction of wages and non-payment of redundancy payments;
  • increased penalties for non-payment of the National Minimum Wage and for employment agency offences;

The Government aims for the Bill to receive consent by mid-2008. The date for its implementation has not yet been set, but it is rumoured that this will be April 2009.

Implications

Although the Bill is unlikely to become law until 2009 there are a number of important changes to plan for.

In particular employers will need to be ready for the abolition and replacement of the statutory dispute resolution procedures so that you comply with the correct process.

Details

The Bill was previously known as the Employment Simplification Bill, which we updated you on in our newsflash of 12 July 2007.

The key legislative changes in the Employment Bill include:

  • Abolition and replacement of the statutory dispute resolution procedures: both the statutory dismissal and grievance procedures will be abolished, as well as automatic unfair dismissal. Instead employers will be encouraged to comply with the ACAS Code of Practice on discipline and grievance procedures (which will be revised). If employers (or employees) unreasonably fail to comply with such code/s then Tribunals can increase (or decrease if an employee is at fault) any award by up to 25%. 
  • Removing Acas fixed-conciliation periods: Acas was restricted to only conciliating during fixed periods of time prior to a hearing. These conciliation periods will be abolished.
  • Introducing award of financial loss for unlawful deduction of wages and non-payment of redundancy payments: Tribunals are given the power to order an employer to make, in addition to the payment (or repayment) of the unauthorised deduction and/or redundancy payment, a compensatory payment to reflect any financial loss suffered by the worker as a result of the employer’s default.
  • Increased penalties for non payment of the National Minimum Wage and employment agency offences: the maximum penalty for underpayment of the national minimum wage or employment agency offences is increased from £5,000 to potentially an unlimited fine.