The Department for Business, Innovation and Skills has announced that the Government will not be introducing ‘no-fault dismissal’ for micro businesses following its call for evidence. The Government has also issued consultations on lowering the cap on unfair dismissal awards and Mr Justice Underhill’s proposals for reforming employment tribunal procedure.
The consultation ‘Ending the Employment Relationship’ considers how measures to increase the use of settlement agreements will work in practice and reducing the cap on unfair dismissal awards – both matters contained in the Enterprise and Regulatory Reform Bill. The consultation:
• proposes reducing the compensation cap on unfair dismissal awards and subjecting this to a second cap of up to 12 months’ pay (where this is less than the overall cap). The Government believes that the current cap of £72,300 has led to unrealistic perceptions about the level of tribunal awards
• seeks views on the content of a new Acas statutory code of practice on settlement agreements. The Enterprise and Regulatory Reform Bill will provide that offers of settlement are inadmissible as evidence in tribunal proceedings, subject to an exception for improper conduct, and the Acas code will give guidance on what is covered. The Government’s suggestions of types of improper behaviour which it believes should not be protected by the legislation include discriminatory behaviour and undue pressure to accept an offer
• sets out a template letter and guidance on reaching a settlement agreement and asks if there is other information or guidance which could help agree a settlement, for example a guideline tariff for settlement.
The second consultation is on Mr Justice Underhill’s recommendations for reform of the Employment Tribunal Rules. The proposed reforms, which include simplified procedures for preliminary hearings and withdrawing cases, are set out in detail in our news story of 11 July 2012. Among other things, the consultation seeks views on:
• legal officers undertaking case management functions in employment tribunals
• requiring judgments to include a 14-day deadline for payment, with interest accruing 14 days from the day after the judgment was sent to the parties, unless the award is paid in full within this period
• the non-payment of tribunal awards in order to decide whether to bring forward further proposals on the issue
• whether the proposed ‘Presidential Guidance’ will give parties a better idea of what to expect at tribunal and what is expected of them
• treating lay representatives the same as legal representatives when awarding costs
• any areas of ambiguity or loopholes resulting from the simpler drafting of the rules.
Both of these consultations close on 23 November 2012.
The Government has also published its responses to the calls for evidence on changes to the TUPE Regulations and ‘compensated no-fault dismissal’ for micro-firms. The Government has decided not to pursue ‘no-fault dismissal’ as it believes that employer confidence is more likely to be improved by its proposals on settlement agreements. However, the Government will work with Acas to make its code on discipline and grievance more accessible and understandable, especially for small businesses. The Government has also committed to consult on any proposals for amendments stemming from the TUPE call for evidence by the end of the year.
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