Employment Bill 2008

February 11, 2007 8:05 am Published by

Employment Bill 2008

The new Employment Bill has been introduced in the House of Lords. The Bill is expected to become law in early 2009. There are some significant proposed changes which both employers and employees should note:

These include:-

1. The scrapping of the statutory grievance and disciplinary procedures, which were introduced in 2004;

2. New enforcement powers under the National Minimum Wage Act;

3. Increased penalties under the Employment Agencies Act 1973;

4. A greater role for ACAS and ending fixed conciliation periods in Employment Tribunal litigation.

Perhaps the most important change will be the removal of the statutory disciplinary and grievance procedures. Under these, at present, employers are required to follow a disciplinary process or else a dismissal for whatever reason ( eg redundancy or misconduct) may well be held to be automatically unfair. Similarly, employees have been required to raise written grievances before issuing claims at the Employment Tribunal. There have been many cases in the Employment Tribunal regarding exactly what constitutes a grievance. Both employers and employees have criticised the 2004 Regulations. The intention was to help cases be resolved informally at an early stage and avoid Tribunal claims. In fact, the procedures have had the effect of encouraging both employers and employees to seek legal advice at a very early stage with an increase in Tribunal claims. Therefore, the DTI (now BERR) appointed Michael Gibbons to conduct an independent review which concluded that the 2004 Regulations were so bad that they should not merely be reviewed but scrapped altogether.

The Bill proposes revising the ACAS Code of Practice on disciplinary procedures, so that rather than just taking note of it, the Employment Tribunal will have the power to increase the compensatory award by 25%. The government are proposing to encourage greater use of ACAS conciliation and have pledged to expand the ACAS telephone helpline. They also want to encourage ACAS mediation ( ie where the parties actually sit down with an ACAS mediator to try and resolve the dispute).

An important change that employers should note is that Employment Tribunals will be given powers to award compensation for losses arising from unlawful deduction of wages or non-payment of redundancy awards ( eg employees’ bank charges).

Employers who fail to pay the National Minimum Wage will have to pay at higher rates for outstanding arrears. Criminal offences under the National Minimum Wage Act may be triable in the Crown Court. Criminal penalties under the Employment Agencies Act 1973 are also to increase.

The Bill changes the law and therefore restores the procedure in the case of Polkey . Under the Polkey principle, if the Tribunal finds that the correct procedure would have made no difference to the outcome, then the dismissal will usually be held to be unfair but the Tribunal should reduce the compensation payable, in some cases to nil.

Interestingly, and contrary to predictions, the Bill does not contain any proposals for compulsory pension contributions by employers.

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