News | Update on government proposals for employment reforms
The government’s plans to reform UK employment law have now been published and opened for public consultation, supplemented by the Employer's Charter, which David Cameron says is "in black and white so there's no longer any confusion".
Whilst only a guide to employers, as the government recognises that there are likely to be individual circumstances, the Charter is intended to clarify employers' rights and responsibilities in the workplace, and to dispel the myth that employees’ have the lion’s share of power.
As long as employers act “fairly and reasonably” the Charter guarantees them certain privileges. For example, they will be able to:
- Ask employees to take annual leave at a time that best suits the business.
- Contact employees on maternity leave to ask when they plan to return to work.
- Make redundancies if the business takes a "downward turn", ask employees to take a pay cut and withhold pay from striking employees.
- Reject flexible working requests if there is a "legitimate business reason".
- Ask employees if they will work more than the maximum 48 hours a week as stipulated in the Working Time Regulations by opting out.
- Dismiss employees who are performing poorly.
- Stop providing work to agency staff (as long as they are not employed by the company).
- Ask employees about future career plans – including issues surrounding retirement.
One of the other main aims of the proposed changes is to avoid costly employment tribunals – which the government believes are weighted in favour of employees – and to improve business confidence in hiring new staff and creating future job opportunities. It wants to encourage businesses to resolve workplace disputes internally, in a way that is fair for both parties and to make the tribunal system "swift, user friendly and effective".
Last year employment tribunal claims rose to 236,000, and increase of 56% on 2009, and businesses spent an average of £4,000 defending each claim, so consultation on tribunal reforms, to explore different methods of dispute resolution in the workplace are probably welcomed by businesses. The government is now asking employers, legal firms and mediation service providers for information on the costs, benefits and barriers to alternative methods. The proposed tribunal reforms include:
- All claims are to be submitted to the Advisory, Conciliation and Arbitration Service (Acas) instead of the Tribunals Service, to try and encourage early conciliation. ACAS will then provide pre-claim conciliation for up to one month.
- Judges are to be allowed to strike out weaker tribunal cases and require payment from claimants – so making a claim may no longer be free.
- Cost limits for claims considered weak or vexatious will be doubled from £500 and £10,000 to £1,000 and £20,000 respectively. It is anticipated that making claims more expensive to pursue will reduce the amount of vexatious claims.
- Tribunal hearings to be shortened, with witness statements taken as read and parties will be encouraged to settle earlier.
- The qualification period for an unfair dismissal claim will be increased from one to two years, which it is believed will reduce claims by between 3,000 and 4,000.
Business Secretary Vince Cable said "Disputes in the workplace cost time and money, can affect morale, reduce productivity and hold back businesses….We often hear that knife-edge decisions about whether to hire new staff can be swung by concerns about ending up in an employment tribunal if things don't work out.”
The consultation, which is the government’s first step in plans to change UK employment law, is due to close on 20th April 2011, during which time the government is looking for feedback on its proposals from businesses, individuals, trade unions and other interested parties.
