Clarity Vital To Tackling Doubts Over Employment Law Reforms

Expert Raises Concerns Over New Package Of Proposals


The Government must provide clarity and further information in relation to its wide-reaching proposals to transform the handling of workplace disputes if experts are going to be won over, an employment law specialist at Irwin Mitchell has warned.

Employment relations minister Jo Swinson has announced new plans which are aimed at cutting the number of workplace disputes which are taken to Employment Tribunal, including:

  • The introduction of a new statutory code and guidance to increase use of Settlement Agreements
  • A 12-month pay cap on awards made in relation to unfair dismissal
  • A consultation on reforming the Transfer of Undertakings (Protective of Employments) – or TUPE – to reduce burdens on business while ensuring employees remain protected

Swinson described the package of reforms as a step towards ensuring tribunals are recognised as “the last resort, not the first port of call”.

Commenting on the new measures announced today (January 17th), Glenn Hayes, a Partner and employment law specialist at Irwin Mitchell’s Leeds office, said: “Whilst the proposals are on the whole sensible and form a part of the Government’s Red Tape Challenge to reduce bureaucracy in the sphere of employment law, it is clear that some serious consideration needs to be given to certain aspects.”

Introduction of a 12-month pay cap for unfair dismissal

He explained: “This is the most significant change proposed, with the Government stating this would run alongside a specified overall cap with the limit being the lower of the two figures. Given the current state of the UK job market, this is likely to have a far-reaching effect on a number of individuals who approach the Employment Tribunal system.

“Proposing such a measure at a time when fees are likely to be introduced in order to bring a claim in the first place could be extremely detrimental to employees who may have previously been adequately compensated for losses based on the limited job market but would of course be a welcome move for employers. The entire purpose of the compensatory award however is to do just that – put the individual back in the position they would have been had the unfair dismissal not occurred and this proposal could have a huge impact on that purpose.”

New statutory code on settlement agreements

On this issue, Glenn said: “The Government needs to provide more information on its plans to ask ACAS to draft a new statutory code regarding settlement agreements.

“It will be absolutely vital this sets out who can initiate conversations, provides clarity as to when a conversation is actually initiated, as well as what can and cannot be said as part of that consultation. At present, this all remains rather vague and there is a clear need for further detail on how this will be expected to work in practice.”

Proposals To Implement the ACAS Early Conciliation process

“This is part of the Government’s drive to reduce the number of Tribunal claims, which is of course sensible considering the number of cases that the system currently has to deal with on a daily basis,” Glenn outlined.

“However, this is likely to bring up a number of issues. Time limits in Tribunals are currently very rigid and changes in this area are likely to bring in some level of uncertainty as to whether claims have been raised in time or not. It is also questionable whether ACAS has got the resources to deal with early conciliation in any event.

“So while this may have been put forward with the best of intentions, there could be some fundamental flaws which need to be considered.”

Reform of TUPE Regulations

Finally, Glenn added: “The Government appears to believe the service provision changes in relation to TUPE have not achieved what they had hoped, so again the aim is to provide more certainty in this area and scrap certain aspects of it.

“While the proposals include allowing more flexibility to change terms and conditions following a TUPE transfer and the reduction of the bureaucracy faced by employers, the plans seem to fly in the face of the intended spirit of TUPE. The regulations are designed to protect the employee and ensure they continue to enjoy the same benefits offered by their old employer at their new employer, subject to very limited exceptions.

“Our concern is that amending the provisions related to restricting changes to contracts following a transfer would not give employees the security they may need in this regard.”