• Further Employment Law Changes Announced

    The Government has outlined a further raft of measures as part of its Parliament-long Review of Employment Law and the Red Tape Challenge. It has begun a call for evidence on current legislation on whistleblowing and published its responses to consultations on how early conciliation will work in practice and on changes to the rules governing the recruitment sector. It has also announced that, subject to Parliamentary approval, the pay-based cap on unfair dismissal compensatory awards will come into force on 29 July. From that date, the maximum award will be capped at a year’s salary or £74,200, whichever is the lower.


    In its call for evidence on whistleblowing, the Government seeks information on whether the current system is effective in capturing all instances of wrongdoing and whether the methods of making a disclosure are still relevant and effective. It is therefore specifically asking for views on provisions that were unaffected by recent changes made to whistleblowing law by the Enterprise and Regulatory Reform Act 2013 – see our feature article in Brief 973. It is also organising discussion sessions on the whistleblowing provisions to feed into the call for evidence.

    The Government states that it is considering whether:
    • the list of prescribed persons/bodies to which protected disclosures can be made should be amendable by the Secretary of State rather than via statutory instrument as is currently the case
    • the referral of whistleblowing claims by employment tribunals to prescribed persons/bodies should be mandatory
    • the definition of ‘worker’ is sufficiently broad to capture all those that need to be protected by the whistleblowing framework, and
    • to introduce a code of practice for employers to guide them on best practice principles for whistleblowing policies within their organisations.
    The Government also states that it would welcome further research into the impact of monetary incentives to encourage whistleblowing in the financial sector in the United States. The call for evidence closes on 1 November 2013.

    Reform of employment agencies and employment businesses

    The Government’s response to its consultation on reforming the rules governing employment agencies and employment businesses states that it intends to proceed with its proposal to replace the current legislation with a new regulatory framework – see our news story of 21 January for further details. The new legislation will:
    • ensure that employment businesses do not withhold payment from a temporary worker
    • continue to restrict employment agencies and employment businesses from charging fees to work-seekers (but retain current exemptions for certain circumstances in the entertainment and modelling sector)
    • give greater clarity on who is responsible for paying temporary workers where multiple businesses are involved
    • prevent employment businesses and employment agencies from penalising a temporary work-seeker for terminating or giving notice to terminate a contract
    • prevent employment businesses from enforcing unreasonable terms on a hirer when a temporary worker takes up permanent employment with that hirer, and
    • ensure that employment agencies and employment businesses keep sufficient records to demonstrate that they have complied with the regulations governing the recruitment sector.
    Some responses to the consultation also indicated that there may be abuse of upfront fees in the entertainment and modelling sectors, and the Government intends to speak to a variety of stakeholders to better understand the issues. Further changes are intended for the enforcement strategy in the recruitment sector, with the Government stating that it will focus on the most vulnerable workers by moving resources from the Employment Agency Standards Inspectorate to the National Minimum Wage (NMW) team at Her Majesty’s Revenue and Customs (HMRC). The NMW team will investigate complaints of non-payment of NMW to temporary workers. Enforcement will be carried out under NMW legislation and will be subject to HMRC sanctions. A small team will remain in BIS to enforce the other regulations which apply to employment agencies and employment businesses, including non-payment to workers earning above the NMW and workers in the entertainment and modelling sectors. Individuals will also be able to enforce their rights informally and through the courts.

    Once draft legislation has been prepared, the Government will carry out another, shorter consultation. Further consideration will be given to the most appropriate way of ensuring that the UK’s wider obligations under EU and international law, such as the recruitment and placement aspects of the Maritime Labour Convention, are upheld.


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