Law BooksThere have been some announcements by the government recently about changes to some major elements of employment law, and I am regularly asked for clarification on what exactly might be involved. So here we go; a brief plain English summary of the proposals and some thoughts on the impact on small businesses.

1. Reducing red tape

The first of two separate announcements was made by Ed Davey the Minister for Employment Relations. Mr Davey announced that three areas of employment law would be reviewed, the overall aim being to reduce red tape. The areas to be looked at are as follows:

Transfer of Undertakings Protection of Employment regulations (TUPE).

TUPE is all about protecting employees’ pay and conditions if their company gets taken over or sold, or if their area of work gets transferred to another employer. Regulations are quite strict at the moment, and can be very bureaucratic, even for very small transfers, so some simplification wouldn’t go amiss, particularly for small employers.

Discrimination compensation.

Currently if someone brings a claim to a tribunal for some form of discrimination, compensation is unlimited, unlike unfair dismissal, which is capped. Although the huge payouts which make the headlines are relatively rare, and usually based on very high earnings in the first place, employers would prefer a bit less uncertainty, and may also feel that a cap would reduce the number of ‘vexatious’ claims.

Redundancy consultation.

Currently if a company needs to make 100 or more redundancies there needs to be a consultation period of 90 days before any dismissals can be made. Under the review that may be reduced, the argument being that it considerably reduces the flexibility an employer has to manage its business in what is often a difficult time. Not something that is likely to affect any small employers, and there is no proposal at present to look at redundancy processes for very small numbers.

2. Consultation on family leave

While we were all digesting the red tape reduction stuff, a few days later Vince Cable the Business Secretary announced a consultation on some fairly radical changes, mainly to family leave as follows:

Shared family leave

Currently there are separate arrangements for maternity and paternity leave, but leave would instead be shared and available equally to both parents. There would be a core of 18 weeks leave reserved for the woman, and each person would have exclusive use of 4 weeks, meaning the paid portion of leave would increase by 4 weeks. (With me so far?)

There is a bit of sharing at the moment, with fathers able to take Additional Paternity Leave if the mother returns to work. But this proposal goes further, with parents able to take some of the leave simultaneously and potentially take chunks then come back then take some more.

Is it a good thing? It provides greater flexibility for families certainly, and for businesses to an extent as more flexible arrangements could potentially be made to suit both the employee and the employer. However as the leave is shared, negotiation and flexibility won’t be just between the woman and her employer but will have to involve the father and his employer as well, which may prove somewhat of a logistical challenge to say the least.

Flexible working

Parents of children under 17 have the right to request flexible working already, but there is a rigid statutory process that must be followed, with specific timescales and procedural arrangements. The proposal here is to do away with the rigid statutory process and replace it with a code of practice.

Temporary flexible working arrangements may be allowed as part of the regulations, and the right to request flexible working may be extended to all staff, not just parents.

Is it a good thing? Well the replacement of the rigid procedure with a code of practice sounds much better for small businesses, and will hopefully replace what often feels like a very forced, over-formal box-ticking exercise with a common-sense, reasonable approach. So far so good. Temporary arrangements may be useful for both employer and employee (although those can be negotiated by mutual agreement anyway).

However although many reasonable employers would consider on an informal basis requests from any staff member to adjust their working arrangements, all employees being given the right to ask and for that request to be properly considered may be a bit of a headache resulting in more admin and management time and potential problems as people who would not have even asked for flexible working previously request it, have it declined and then feel aggrieved.

Annual leave while off sick and equal pay audits

Mr Cable also included proposals to incorporate into UK statute some recent EU case law giving employees off long term sick the right to accrue and take annual leave (hopefully giving greater clarity on the right and how it should be used), and to force employers who are taken to a tribunal for an equal pay claim to conduct an equal pay audit.

So there we have it. Overall it looks like there might be a hopefully a bit less bureaucracy and restriction as a result of the first announcement, and perhaps a bit more as a result of the second set. Watch this space for more details, although any major changes are unlikely to come into effect for quite some time.

changes to the law