The Government recently published the Beecroft Report, a report commissioned to look into further changes in employment law.

The substance of the proposals was as follows:-

• Collective redundancies – reducing the consultation period to 30 days irrespective of the number of employees at risk of redundancy.
• Reforming Tribunal procedures
• A delay in the roll-out of pension auto-enrolment for smaller employers
• A cap on discrimination awards. This has been rejected by the Government.
• TUPE - harmonising employees terms and conditions of employment after 1 year post TUPE transfer, clarifying the economic, technical, & organisational (ETO) exemption, and replacing the service provision change element with an alternative method for identifying whether a TUPE transfer has taken place.
• Scrapping claims for “third party harassment” (e.g. customers making racist comments to employees)
• Making small businesses exempt from employment law altogether. This has been rejected by the Government, as have proposals to abandon the implementation of the Agency Workers Regulations and changes to immigration regulations.
• The possible re-introduction of the default retirement age (to be reviewed in 2016).
• Compensated 'no fault dismissals' for small firms with fewer than 10 employees under which the employer can dismiss an employee without providing a reason, so long as they provide the employee with an enhanced severance payment equivalent to a redundancy payment. The Government has asked for more evidence on this by the 8^th June 2012. The report originally called for the introduction of no fault dismissals for all employers, but this was rejected by the Government. Instead, the Government appears to want to move in the direction of so-called ‘protected conversations’ under which an employer and an employee can have a discussion about any issues, free from the risk of it being used as evidence in an Employment Tribunal case at a later date. Essentially, this would be an extension of the ‘without prejudice’ rules
• Abandonment or delay of the proposal to introduce flexible shared parental leave. This was dropped from the final report.
• Scrap the right to request flexible working. This was also dropped from the final report.
• Portable CRB checks (to be introduced in 2013)

In terms of the 'no fault dismissal' element of the proposals, Business Secretary, Vince Cable, told the BBC: “There's one bit which is this so-called 'no-fault dismissal', which some people describe as a hire-and-fire system. I don't see the role for that.Britain has already got a very flexible, cooperative labour force. We don't need to scare the wits out of workers with threats to dismiss them. It's completely the wrong approach." Indeed, writing in The Sun, Mr Cable went further: “Some people think that if labour rights were stripped down to the most basic minimum, employers would start hiring and the economy would soar again. This is complete nonsense. British workers are an asset, not just a cost for company bosses. That is why I am opposed to the ideological zealots who want to encourage British firms to fire at will." Labour leader, Ed Miliband, also pointed out to the BBC that: “We need an economy based on long-termism, investment and training. We need to get away from an economy based on a short-term, take-what-you-can, fire-at-will culture.”

A number of changes to employment law will be implemented during the course of 2012, many of them emanating from the Coalition Government’s, Resolving Workplace Disputes consultation, and the Red Tape Challenge.

On the 6^th April 2012, the following changes will come into force:- 

• The qualifying period for an employee to be eligible to bring a claim for unfair and constructive dismissal, will increase from 1 year’s continuous service to 2 years. Nevertheless, the change will only apply to those employees who start a new job on or after the 6^th April 2012.

• The name of ‘Compromise Agreements,’ will change to ‘Settlement Agreements’

• Statutory maternity, paternity and adoption pay will increase from £128.73 to £135.45 per week. Statutory sick pay also increases from £81.60 to £85.85 per week, and the lower earnings limit for primary Class 1 national insurance contributions, increases from £102 to £107.

• The maximum amount that a Tribunal can order a Claimant to pay in terms of a deposit order increases from £500.00 to £1,000.00, and the Tribunal now has the ability to order a Claimant to pay a deposit order, as a condition of continuing with the Claim, at any stage of the process. Also, the maximum amount that a Tribunal can order a legally represented party to pay in respect of a costs order, increases from £10,000.00 to £20,000.00.

• Unless a Tribunal directs otherwise, witness statements will no longer need to be read out loud at a Tribunal Hearing. Instead, they will be taken as read.

• The Tribunal will no longer reimburse the travelling and other expenses of witnesses attending a Tribunal Hearing. Instead, the Tribunal now has the power to order that where witnesses have been required to attend via a witness order, that the parties bear the costs, and that the losing party compensate the successful party for any such costs that have already been paid out.

• Where an employee is injured at work, the period of incapacity which triggers the requirement upon the employer to report the incident, increases from more than 3 days to in excess of 7 days. The deadline for making the report increases from 10 to 15 days.

• Section 147 of the Equality Act 2010 has been amended to remove doubts as the validity of certain compromise agreements, and doubts as to the independence of an employees own ‘independent adviser’ for the purposes of s147.

On the 1^st October 2012, further changes come into effect, in that for firms with 250 or more employees, those employees who are not already in a workplace pension scheme, and who earn over £7,475 per annum (and are aged over 22, but under State Pension Age), must be auto-enrolled into a qualifying pension scheme, except where the employee opts out. Employers must also make contributions, and the employee will also benefit from tax relief. Where an employee opts out, then the employer must make arrangements for re-enrolment at 3 year intervals. Employees, nevertheless, have the right to continue to opt out. For firms with 50-249 employees, auto-enrolment begins from the 1^st April 2014, and for firms with 30-49 employees, it begins from the 1^st August 2015. For employees with less than 30 employees, auto-enrolment starts on the 1^st January 2016.

At present, to be eligible to bring a claim for unfair or constructive dismissal, an employee must, with certain limited exceptions, have at least 1 years continuous service. However, from the 6th April 2012, that changes, as the qualifying period increases to 2 years continuous service with effect from that date. Nevertheless, this will only apply to employees who have joined the particular employer they are bringing the dismissal claim against either on or after the 6th April 2012. That is, the 1 year rule will continue to apply to employees who joined before the 6th April 2012.

The name 'Compromise Agreement' will change with effect from April 2012 to 'Settlement Agreement'. The Government has made the change as it believes that the word "compromise" has certain connotations which can prove obstructive to negotiations and the parties reaching settlement.

The Agency Workers Regulations (hereafter referred to as "the Regulations") came into force on the 1st October 2011. The key elements of the Regulations are that:-

• From the outset of their assignment, an agency worker is entitled to full access to facilities such as the canteen, child care facilities, etc, and access to details relating to job vacancies.
• Once an agency worker has been in the same job with the same hirer for 12 weeks (known as the 'qualifying period'), then they are entitled to equal treatment in respect of pay, duration of working time, rest periods and breaks, night work, and holidays. Pregnant workers will also be entitled to paid time off during an assignment for ante-natal appointments. 

In relation to pay, the equal treatment rule also applies to overtime pay and bonuses and commissions where the payments are linked to the amount and quality of the work provided such as the attainment of sales targets. Nevertheless, the rule does not apply to bonuses that are not linked to performance, such as bonuses that reward loyalty and long service. It also does not apply to occupational schemes (e.g. sick pay), redundancy and notice payments, most benefits in kind, guarantee payments, and time off re trade union activities.

Attempts by employers to try and circumvent the Regulations such as placing agency workers on a series of 11 week assignments or moving them between roles is prohibited by the Regulations. Indeed, an employer could be subject to a fine of up to £5,000.00 if they engage in such activities. 

Since the Regulations came in to force, employers have been looking at ways of softening the impact of the Regulations. Options discussed include:-

• Ensuring that agency workers do not remain with the company long enough to attain the 12 week qualifying period.
• Requiring that the agency or other third party employ the worker directly.
• Increased use of outside self-employed contractors
• Direct recruitment of temporary staff
• Assessing pay and benefits and whether the various elements fall within the parameters of the equal treatment requirements.

What are the practical ramifications for employers in relation to the Regulations? Essentially, employers need to review their existing procedures for recruiting agency workers and put procedures in place for monitoring the duration of agency worker contracts. They also need to assess what the financial impact will be of the Regulation's, review their existing agency worker contracts, and determine who the comparator groups will be for agency workers who attain the 12 week qualifying period.