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The Enterprise and Regulatory Reform Bill

30th May, 2012

The Enterprise and Regulatory Reform Bill (“the Bill”) was published and introduced into Parliament on 23 May 2012.  Changes planned to employment law are contained in Part 2 of the Bill.

 

The Bill, which was revealed in the Queen’s Speech on 9 May 2012, contains:

  1. The requirement for claimants to contact the Advisory, Conciliation and Arbitration Service (“ACAS”) before issuing a claim in an employment tribunal.  An ACAS conciliation officer will endeavour to promote settlement between persons who would be parties to the proceedings.
  2. The right for certain employment tribunal claims to be determined by a legal officer, subject to the parties’ written consent.
  3. Changes to the composition of the Employment Appeal Tribunal (“the EAT”).  Unless a judge directs otherwise, cases in the EAT will be heard by a judge sitting alone.  A judge can direct that proceedings are to be heard by a judge and either two or four appointed members.  Alternatively a judge can also, with the consent of the parties, direct that proceedings are to be heard by a judge and either one or three appointed members.
  4. A power given to the Secretary of State to increase or decrease the unfair dismissal compensatory award.
  5. A right for an employment tribunal to issue a financial penalty between £100 and £5,000 against an employer who has breached any of its worker’s rights and involves a breach of one or more aggravating features.
  6. Clarification that a disclosure, in order to bring an automatic unfair dismissal claim for whistleblowing, is not protected unless it is believed to be made in the public interest.
  7. A change to rounding up increases to a week’s pay to the nearest £1 rather than to the nearest £10.
  8. A renaming of compromise agreements “settlement agreements”.

 

The Bill will also aim to strengthen the framework for setting directors’ pay by strengthening shareholder power.  The Bill will repeal section 439(5) of the Companies Act 2006, making it possible for directors’ remuneration to be conditional on the outcome of the shareholder vote on the directors’ remuneration report.

 

 

The Bill is expected to have its second reading in the House of Commons on 11 June 2012.

 

If you have a query on any aspect of the Bill and the effect that it may have on your business, please do not hesitate Helen Watson in the Employment Team at [email protected].

 

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