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Government publishes Employment Bill

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2007/123) issued by The Government News Network on 7 December 2007

The Government today published the Employment Bill, aimed at toughening penalties for rogue employers and affording greater protection for agency workers. It would boost powers for employment agency inspectors and simplify dispute resolution procedures.

The Bill has two key elements aimed at improving the effectiveness of employment law to benefit employers, trade unions, employees and the public sector.

Tough new penalties would be introduced for businesses not paying workers the minimum wage and agencies which try to exploit workers and undercut legitimate businesses.

Changes to the dispute resolution system would lighten the regulatory burden on business and encourage more workplace disputes to be resolved earlier and informally.

Employment Relations Minister Pat McFadden, said:

"The National Minimum Wage was a key right this Government introduced to ensure workers were paid fairly. These changes would make sure everyone who is caught not paying their workers will be punished, with the potential for unlimited fines.

"No business should be allowed to get away with unfairly undercutting legitimate operators by exploiting workers.

"Our proposed changes to dispute resolution, responding to the Gibbons Review, would ease burdens for businesses and employees by abolishing rigid, statutory processes for dispute resolution, while also ensuring there is no discrimination in employees' rights."

Notes to Editors

1. The Bill would:

* Toughen up penalties for those who break the law, increasing the maximum penalty for underpayment of the national minimum wage or employment agency offences from a £5,000 fine to an unlimited fine. The most serious cases of non-compliance will be tried in a Crown Court, which will have the power to impose an effectively unlimited penalty.

* A fairer method for dealing with national minimum wage arrears, calculated so that workers do not lose out as a result of underpayment.

* Strengthening the investigative powers of the Employment Agency Standards Inspectorate, allowing them greater scope to access financial information to help them check whether a worker's complaint is an isolated instance, or an example of widespread abuse.

* Respond to the Gibbons Review of dispute resolution by repealing the current statutory dispute resolution procedures. This forms part of a wider programme of work following the Gibbons review, which aims to help resolve disputes at an earlier stage and improve the way employment tribunals work. Acas will be revising its statutory Code on discipline and grievance procedures. The Bill provides that tribunals will be able to adjust awards where parties have unreasonably failed to follow the Code.

* Make changes to ensure compliance with the European Court of Human Rights (ECHR) judgement in Aslef v UK, and clearer rights for trade unions to determine their membership.

2. Existing legislation in this area is:

* Employment Relations Act 2004

* Employment Act 2002

* (Dispute Resolution) Regulations 2004

* National Minimum Wage Act 1998

* Employment Agencies Act 1973