The consultation, which closes on 20 April 2011, sets out the latest Government plans for reforming employment laws. The proposed changes seek to address some of the concerns raised by businesses about the current system of regulations, and improve the efficiency of the employment tribunal system.
Sian Stubberfield, from law firm Furley Page, says one proposal that is likely to be extremely unpopular with the business community is the introduction of financial penalties on employers who have failed in their legal obligations towards an employee.
“The proposal would give a tribunal an additional power to impose a penalty equal to half of the total amount awarded to the claimant,” explains Stubberfield. “This would be payable to the Exchequer rather than the claimant, with an upper limit of £5,000. Employers would be encouraged to pay quickly, with a reduction of 50% of the financial penalty available to those who paid within 21 days.
“The aim is to reduce the number of tribunal claims but employers may feel that the Government is ‘giving’ with one hand under some proposals and effectively ‘taking back’ the potential benefits under this proposal.”
Other key proposals in the consultation paper, which has been published by the Department for Business, Innovation and Skills and the Tribunals Service, include:
Increasing the qualifying period for bringing a claim for unfair dismissal from one year’s service to two years’ service. The Government hopes this will encourage small businesses, who would be particularly vulnerable to claims, to take on new staff without fear of a tribunal claim;
Measures to encourage early conciliation and mediation, with all claims required to be submitted initially to Acas instead of the Tribunals Service;
Introducing a fee payable by both claimants and respondents at a tribunal, to try to prevent claims that have little or no prospect of success
Sian concludes: “Overall, the Government’s proposals aim to encourage workplace disputes to be resolved at an early stage, cutting the number of claims that proceed to full hearings and ultimately reducing the amount of time and money that employers have to invest to defend themselves.”