11.05.11

Government Announces Next Steps in Employment Law Review

The Government has announced further areas it will consider reforming as part of its review of employment law – including collective redundancy consultation periods, the Transfer Undertakings Protection of Employment Regulations (TUPE) and compensation for discrimination awarded by employment tribunals.

Ministers say that the ongoing review is an important part of its plans to deliver growth by breaking down barriers, boosting opportunities and creating the right conditions for businesses to start up and thrive.

Employment Relations Minister, Edward Davey, detailing the plans said:

“The areas we are reviewing are priorities for employers. We want to make it easier for businesses to take on staff and grow.

“We will be looking carefully at the arguments for reform. Fairness for individuals will not be compromised – but where we can make legislation easier to understand, improve efficiency and reduce unnecessary bureaucracy we will.”

The Government will look in detail at the case for reforming:

  • Compensation for discrimination.  Employers have expressed concern about the high levels of compensation sometimes awarded by Employment Tribunals in cases of discrimination - and the lack of certainty they have about the level of award they may be required to pay. Compensation levels for cases of discrimination are unlimited and employers worry that high awards may encourage people to take weak, speculative or vexatious cases in the hope of a large payout. This can lead to employers settling such cases before they reach a Tribunal.
  • Collective redundancy rules. Employers are concerned that the current requirement that consultation over collective redundancy runs for a minimum period of 90 days is hindering their ability to restructure efficiently and retain a flexible workforce. Employers in financial difficulty worry about how long they need to keep paying staff after it has become clear that they need to let them go. They also claim it is not clear from the legislation at what point consultation on redundancies should start or end.
  • TUPE. These rules implement a European directive and protect employees’ terms and conditions of employment when a business is transferred from one owner to another. These rules offer important protections but some businesses believe that they are `gold plated’ and overly bureaucratic.

The Government will start reviewing these areas this year. It wants to ensure that the regulations are fit for purpose, but it says that legislation will not necessarily be the route to implement any change if there is a case for reform.

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