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What does the Enterprise and Regulatory Reform bill mean for you?

The Enterprise and Regulatory Reform Bill is one of the government’s flagship pieces of legislation. It’s designed to cut the cost of doing business – particularly all that “red tape” we hear so much about – and also help create jobs. The Bill includes significant changes to the employment tribunal system.

Since the Bill has just had its second Reading as it winds its way through the usual Parliamentary channels, it’s worth employers taking a quick look. We have to emphasise that this isn’t final legislation and there’s plenty of bargaining yet to be done on these contentious issues, so much can change between now and the eventual shape of the law.

That said, here are the highlights of the plans in our view:

  • In employment disputes, the move to conciliation via ACAS will happen earlier, and there will be more time to reach a settlement before the courts get involved. This is designed to reduce the amount and cost of litigation.
  • In order to reduce the burden of unfair dismissal awards on SMEs, we expect to see a lowering of the award cap.
  • Protection for ‘whistleblowers’ may be scaled back, being limited to incidents only where disclosure is deemed to be ‘in the public interest’. This once again reduces the workload of the court system, ensuring that the whistleblower protection is applied successfully where it was designed to be effective, and not used as a tool for litigious appellants.
  • Straightforward employment tribunal claims may be dealt with by legal officers rather than a Judge or panel. This would speed up claims and appeals, something which is bound to be in everyone’s interests!
  • We expect compromise agreements, which have become a staple and accepted alternative to more expensive channels, to become more widespread. They are likely to be renamed “Settlement Agreements”.

The name change isn’t just window-dressing, though. It does indeed sound more pleasant, but “Settlement Agreement” also better represents the true purpose of the process: namely, to facilitate more open conversations between the aggrieved parties. There are also structural differences. Under a settlement agreement process, unlike a compromise agreement, a formal dispute does not have to exist in order for negotiations to begin. We expect to see more details on settlement agreements later in the year.

The Government insists that settlement agreements won’t compromise ‘no-fault dismissals’ as proposed earlier.

  • The facilitation of certain EAT cases to be heard by Judges alone which mirrors the recent ET change.

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