Government announces further employment law reforms
On 14 September 2012, the Government published details of the next step of its on-going employment law reform agenda, which is says “comes in response to calls from business to simplify and speed up the process of ending the employment relationship when it breaks down, for the benefit of both employers and employees.”
The latest proposals are contained in two new consultation papers: (1) Ending the Employment Relationship, which deals with unfair dismissal compensation and measures to encourage the use of settlement agreements; and (2) Employment Tribunal Rules: Review by Mr Justice Underhill, which deals with Mr Justice Underhill’s recent proposals for reform of employment tribunal rules and practice.
Ending the Employment Relationship
This consultation paper seeks views on ways to support the use of settlement agreements and changes to the compensatory award limit in unfair dismissal cases. It asks for feedback on the following:
1. The proposed level of the statutory limit on the compensatory award in unfair dismissal claims and how it should be calculated. The main options appear to be either an unspecified smaller upper limit, or a cap of up to 12 months of the dismissed worker’s pay. There is no proposal to change the basic award. The current cap is £72,300.
2. Proposals to simplify the use of settlement agreements. These include a statutory Acas code of practice on settlement agreements (which would incorporate an optional model settlement agreement and guidance notes, and optional model letters that employers can use to propose settlement terms in a variety of situations) and a “guideline tariff” to help parties set the severance payment.
Employment Tribunal Rules – Review by Mr Justice Underhill
This consultation paper seeks feedback on various proposals to reform employment tribunal rules and procedures, including plans to:
1. Simplify and streamline procedures for preliminary tribunal hearings and the withdrawal of cases; and
2. Encourage and facilitate the use of alternative forms of dispute resolution at various stages of the tribunal process.
Responses to both consultations must be received by 23 November 2012.