Last Friday Vince Cable and his team at BIS demonstrated how hard they have been working over the summer on the Government’s employment law reform programme. They have published two new consultation papers and two response papers, not to mention the associated press releases, impact assessments and the like.
Ending the employment relationship seeks to explore two separate proposals that are already reflected in the Enterprise and Regulatory Reform Bill. These are promoting greater use of compromise agreements (to be re-named settlement agreements) and introducing an earnings-related cap on the maximum compensatory award for unfair dismissal.
The consultation paper suggests building on the plans to allow “protected conversations” about settlement in limited circumstances by promoting the use of a template agreement and model letters, supplemented by a new statutory code of practice. However, since the legislation regulating the form of these agreements will not change, the model agreement is no simpler than the typical compromise agreement currently in use. The imposition of a cap, if implemented, will be a more radical change. The document suggests that the Government currently favours one based on 12 months’ median earnings, which at just under £26,000 would be around a third of the current limit of £72,300.
The consultation on employment tribunal rules assesses the level of support for the new draft rules of procedure put together by Mr Justice Underhill earlier this year. Those with practical experience of employment tribunals will be particularly interested in the new forms ET1 and ET3 which have now been published, as well as draft guidance for employment judges adjournments and default judgments.
These consultation papers are accompanied by two other documents. The TUPE response follows on from last year’s call for evidence about the effectiveness of the Transfer of Undertakings Regulations 2006 The response does not come up with any substantive proposals. Instead it highlights the points of greatest concern and says that there will be a “further period of policy development and stakeholder engagement”.
The fourth major document launched last week is the no fault dismissal response. As widely expected, this rules out the introduction of a no-fault dismissal regime for micro-businesses. Instead it suggests that further guidance should be made available to help smaller employers navigate their way through the ACAS code of practice and guidance on disciplinary and grievance procedures. ACAS has also been asked to consider some relatively minor adjustments to the code and guidance itself, particularly to distinguish more clearly between capability and conduct dismissals.