Confused by recent employment law announcements? Key points for small business owners

Dec 13, 2011 | Business Principles

There’s been an awful lot of discussion recently about whether current employment law is too harsh on British business, and what could or should be done about it if it is. After plenty of rumours and leaks, Business Secretary Vince Cable made a key speech last month confirming some changes we knew about and announcing some important new consultations. There were more than 200,000 claims in the employment tribunals last year and the proposals are intended to reduce that number and apparently deliver £40m in savings to employers.

There’s been a lot of commentary from HR and employment law professionals about the merits of the proposed changes, and speculating about how they might play out in tribunals. The debate makes very interesting reading for me, but our focus here at face2faceHR is keeping small businesses informed about exactly what’s happening in plain English and how it will affect them. So rather than a personal critique here’s our basic factual guide to what might be changing.

Key points from Vince Cable’s speech:

  1. Claims will have to be submitted to ACAS to give both parties the chance to resolve the dispute before it ends up in a tribunal.
  2. Employers will be able to hold ‘protected conversations’ with employees allowing them to discuss more openly poor performance and similar concerns without worrying that what is said will be held against them in a tribunal claims.
  3. There are plans to simplify compromise agreements, enabling both sides to reach a no-fault settlement possibly using a standard text.
  4. There will be a system of ‘rapid resolution’ for straightforward claims, intended to be a quicker cheaper alternative to a full tribunal.
  5. A structure of fees will be introduced for anyone wishing to bring a claim.
  6. Judges will be able to impose financial penalties on employers who breach employment law, separate from compensation awarded to the employee.
  7. The qualifying period for unfair dismissal will increase from one to two years, effective in April 2012.
  8. A system of compensated- no-fault’ dismissals may be introduced for micro businesses employing 10 employees or less.
  9. A- simpler, quicker and clearer’ dismissal process will be introduced.
  10. The process for getting Criminal Records Bureau checks will be simplified.
  11. Attempts will be made to simplify the Agency Workers Directive, introduced this year.
  12. National Minimum Wage regulations will be simplified.
  13. Statutory consultation periods on collective redundancies will be reduced.
  14. Attempts will be made to simplify TUPE rules.
  15. The right to request flexible working will be extended to more employees.
  16. Maternity leave will be- modernised’ so it becomes- shared’ and- flexible’.

Some of this is still vague obviously, and the devil will be in the detail when it emerges. I’m not convinced the- protected conversations’ are quite as much of a good idea as they might initially sound. Retirement will effectively be excluded as a topic from those due to discrimination legislation, and I think that’s where they could have been very useful.

The other one that will stand out for some of my clients is the no-fault dismissal for micro-businesses. Sounds great, but one concern here would be difficulty recruiting quality staff.  Lack of protection against dismissal in a very small business reduces their appeal for prospective employees further, especially when combined with frequently less generous benefits.

However I did say I would refrain from a critique of the proposals, so no further commentary at the moment at least! As more detail emerges from consultation I’ll be back to discuss the ins and outs and let small business owners know what they need to be doing about changes.

For more information about upcoming changes to employment law or for assistance with an employment law problem in your business, contact us at [email protected].