Business Secretary Vince Cable has now presented the Enterprise and Regulatory Reform Bill to Parliament. The Bill is seen as a central element in the Government's aim for strong, sustainable and balanced growth and contains a number of employment law measures.

Most notably there is a power for employment tribunals to impose financial penalties on employers where the employer has breached any of the worker's rights to which the claim relates and the employment tribunal is of the opinion that the breach has one or more aggravating features. The amount of the penalty will be subject to a minimum of £100 and a maximum of £5000, although there is a discount of 50% for early payment (within 21 days of the notice of penalty). The Bill also allows the Secretary of State to change the way compensatory awards are calculated and in future these may be limited by an amount related to median annual earnings or calculated with reference to the individual claimant's annual salary. We understand that if the median annual earnings power is exercised the compensatory award will be capped at somewhere between £26,000 (one year's earnings) and £78,000 (three years' earnings).

Several other changes to the employment tribunal system are planned.  These include:

  • requiring prospective claimants to contact Acas before instituting proceedings;
  • extending limitation periods to allow for conciliation;
  • introducing "legal officers" to make decisions in certain circumstances (under a "rapid resolution" scheme) provided all the parties to the proceedings consent in writing;
  • making changes to the composition of the Employment Appeal Tribunal so that most cases are heard by a Judge alone;
  • restricting protected disclosures to disclosures believed to be made in the public interest; and
  • renaming "compromise" agreements "settlement" agreements.

The stated aim of the Bill is to encourage parties to come together to settle their dispute before an employment tribunal claim is lodged and to  make the determination of less complex disputes quicker and cheaper for employers and employees so that employment tribunal proceedings are less daunting and business has more confidence to take on new staff.

Business Secretary Vince Cable said "Growing our economy out of a period of acute crisis is the most pressing issue for this Government. We want to make sure the right conditions are in place to encourage investment and exports, boost enterprise, support green growth and build a responsible business culture. The measures in the Enterprise and Regulatory Reform Bill will help make Britain one of the most enterprise-friendly countries in the world. It will improve our employment tribunals, reform and strengthen competition enforcement, scrap unnecessary red tape and help ensure that people who work hard and do the right thing are rewarded."

Please click  here for a link to the Bill.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 29/05/2012.