Cable sets out new agenda for employment regulation
Employment Law & HR update 07/12/2011
In a wide-ranging speech at the end of November, Business
Secretary Vince Cable set out the coalition government's agenda for
employment law reform in the remainder of the Parliament.
The speech covered everything from a proposed "compensated no
fault" dismissal scheme for micro-businesses employing fewer than
10 staff to a root and branch review of employment tribunal rules
and procedures. And employers and their advisors need to be on
their toes because some of the changes are happening as soon as
What is Vince Cable proposing?
A wide range of changes are being proposed. These include:
- From April 2012 - Increasing the qualifying period an employee
has to work for an employer before being able to claim unfair
dismissal, up from one year to two years;
- From April 2012 - Removing payments for witness expenses in
- From April 2012 - Making it usual practice for Unfair Dismissal
tribunals to consist of a legally-qualified judge alone, without
members from business and workforce representatives on the
Is it all good news for employers?
Not necessarily. Among the proposals being taken forward are
penalties, or fines, for employers who fight employment tribunal
claims and lose. These fines will range
between £100 and £5,000 and will be imposed in addition to any
compensation the employer is ordered to pay to the worker.
What else is being taken forward?
The new concept of "compensated no-fault dismissals" is going to
further consultation. The idea behind this is that employers will
be able to dismiss poorly-performing staff simply by "paying them
off", rather than following a potentially long performance
management procedure. There are no suggestions yet about what the
level of payments might be, or about how employers will be able to
protect themselves against allegations of unlawful
Another new idea is for employers to be able to have
"off-the-record" talks with their staff, known as "protected
conversations". This facility might allow employers to discuss
employees' retirement plans, a facility that was lost when the
government abolished the retirement age and "right to request not
to retire" procedure. The difficulty, once again, is how employers defend allegations that employees have
been unlawfully discriminated against when these conversations take
Because of the need for consultation, the very earliest these
proposals may become law is October 2012.
What about changes to employment tribunals?
A wide range of measures is being set in progress, aimed
principally at reducing the cost of the employment tribunals
service to the taxpayer. Government figures estimate that each
tribunal claim costs the taxpayer £1,900 and the employer £4,000,
not including any compensation awarded.
A senior Judge has been asked to review tribunal procedures,
with a view to simplifying things and reducing cost. Again, any
changes, except those outlined above to unfair dismissal and
witness expense payments, will not happen before late 2012 at the
As the proposals take shape, Mentor will continue to keep you
up-to-date on their progress and implications for your business or