Important Employment Law Reforms

UK employment law reform continues. We have set out some important changes below that have been announced by the Department for Business, Innovation & Skills.

1.      Maximum unfair dismissal compensatory award: This will be capped at the lower of (i) twelve months' pay; and (ii) the statutory maximum compensatory award (which is set each year and is currently £74,200).  It is anticipated that this change will come into effect this summer.

2.      Early conciliation through Acas: The Enterprise and Regulatory Reform Bill is making its way through parliament with the intention of simplifying and streamlining the Employment Tribunal process. One such measure is the introduction of a requirement for most prospective claimants to consider conciliation through Acas before a Tribunal claim can be commenced. Acas has confirmed that the new system will be introduced in April 2014.

3.      Removal of the service provision change and employee liability information provisions from TUPE: The government has issued a consultation paper seeking views on this proposal by 11 April 2013 and will then issue a response within 12 weeks. If the consultation supports the proposal then the government will seek to introduce the changes in October 2013.

The hope is that these proposals will (a) increase certainty for employers regarding the potential cost of disputes and encourage resolution before a claim is made and (b) simplify TUPE and provide more flexibility for employers.  We will update you on the proposals as they develop.