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Insight

Enterprise and Regulatory Reform Bill

29/05/2012
The Enterprise and Regulatory Reform Bill has just been introduced to Parliament (23 May 2012) and a second reading will take place on 11 June 2012. The aim of the Bill is to implement key proposed The Enterprise and Regulatory Reform Bill has just been introduced to Parliament (23 May 2012) and a second reading will take place on 11 June 2012. The aim of the Bill is to implement key proposed Government reforms to employment law.

The Bill's main and possibly controversial measures include:

• a requirement for any prospective claimant to involve ACAS before initiating proceedings.  At present there is no obligation on prospective claimants to contact ACAS or consider conciliation at any stage.  However, the Bill provides that a claimant will be unable to institute proceedings without a certificate from ACAS concluding either that settlement is not possible or that a particular prescribed (yet to be identified) time period has expired without settlement being reached.

• Employment Appeal Tribunal cases to be heard by a Judge sitting alone. 

• additional powers permitting The Secretary of State to vary the cap on the compensatory award for unfair dismissal claims.  The variation can either be a specified amount between 1 and 3 times the median annual earnings; a specified number multiplied by a week's pay of the Claimant (not to be less than 52 weeks); or the lower of these two.  The Bill also provides that different amounts can be specified in relation to employers of different descriptions, however, no definition of "different descriptions" is provided.

• financial penalties on employers for breaches of employment law.  Although not clearly defined within the Bill, it appears that if a breach has one or more aggravating factors then the Tribunal may order an employer to pay a penalty to The Secretary of State.  This penalty is to be 50% of any financial award awarded by the Tribunal against the employer but is subject to a minimum of £100 and a maximum cap of £5000.

• proposals to change the wording in the Employment Rights Act 1996 in relation to whistleblowing.  In order for a disclosure to be a protected disclosure, it would need to be made in the public interest as well as in the reasonable belief of the worker making the disclosure.

We will update the Blog with any further updates on the Bill as it passes through Parliament.

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