Major changes proposed for employment law
The law could be shifting in favour of employers, especially for smaller businesses.
The Business Secretary, Vince Cable, has outlined a package of measures aimed at revising the way employers hire, manage disputes, and dismiss employees. The idea is to reduce unnecessary demands on business while still generally safeguarding employees’ rights. From 6 April 2012, the period that employees must have been with an employer before they can claim unfair dismissal is to be raised from one to two years.
One of the more radical proposals is to introduce compensated, ‘no fault’ dismissals for micro-firms with fewer than ten employees. An underperforming employee of such a micro-firm could be paid off with a cash settlement, with no subsequent right to claim for unfair dismissal. The Government had previously aired the suggestion that compensated, ‘no fault’ dismissals might completely replace the unfair dismissal process. The resulting controversy ended in the Prime Minister’s denial of the proposal.
Nevertheless, the Government is continuing to look at more ways to simplify the existing dismissal process, including an overhaul of the employment tribunal system, which some commentators believe has become increasingly complex and inefficient. There will be a consultation on the introduction of fees for anyone wishing to take a claim to an employment tribunal.
Mr Cable also announced that the Government will consult on a proposal to allow ‘protected conversations’ whereby employers can discuss issues such as poor performance or retirement with employees, without any fear of the discussions being used in an employment tribunal claim. There will be further consultation on simplifying compromise agreements – to be renamed ‘settlement agreements’ – where employees sign away all of their rights to make a claim against their employer in return for the payment of an agreed amount of compensation. There are several other proposals, so 2012 looks as if it will be an important year for employment law reform.
Employment tribunals have traditionally been unwilling to accept that the cost of providing support to a disabled employee is, alone, a legitimate reason for discrimination. But in a recent case, Cordell v Foreign & Commonwealth Office, it was accepted that there was no disability discrimination where the costs involved in making the support available were unreasonable. Although this may indicate a future willingness to allow discrimination on a purely economic basis, it should be noted that in this case the additional costs involved with the disputed promotion were considerable – around £145,000 a year – and the decision is not binding on other tribunals.