The Government
has today announced new areas that it will consider reforming as
part of its review of employment red tape – including collective
redundancy consultation periods, the Transfer Undertakings
Protection of Employment Regulations (TUPE) and compensation for
discrimination awarded by employment tribunals.
The ongoing review is an important part of the
Government's plans to deliver growth by breaking down
barriers, boosting opportunities and creating the right conditions
for businesses to start up and thrive.
The Chancellor of the Exchequer, George Osborne, will encourage
businesses to make their voices heard on the issues which matter
to them, including employment law, in his speech to the Institute
of Directors Annual Convention.
The Chancellor said:
“If we are to support private sector growth and create jobs, we
can’t shy away from looking at difficult issues like employment
law. Examining these areas of the law which could be holding back
job creation demonstrates the Government’s commitment to go for growth.”
Employment Relations Minister Edward Davey detailed the plans
during a speech at the Institute of Economic Affairs.
Edward Davey said:
“The areas we are reviewing are priorities for employers. We want
to make it easier for businesses to take on staff and grow.
“We will be looking carefully at the arguments for reform.
Fairness for individuals will not be compromised – but where we
can make legislation easier to understand, improve efficiency and
reduce unnecessary bureaucracy we will.”
The Government will look in detail at the case for reforming:
Compensation for discrimination. There need to be remedies for
discrimination, but employers have expressed concern about the
high levels of compensation sometimes awarded by Employment
Tribunals in cases of discrimination - and the lack of certainty
they have about the level of award they may be required to pay.
Compensation levels for cases of discrimination are unlimited and
employers worry that high awards may encourage people to take
weak, speculative or vexatious cases in the hope of a large
payout. This can lead to employers settling such cases before they
reach a Tribunal. Collective redundancy rules. Employers are
concerned that the current requirement that consultation over
collective redundancy runs for a minimum period of 90 days is
hindering their ability to restructure efficiently and retain a
flexible workforce. Employers in financial difficulty worry about
how long they need to keep paying staff after it has become clear
that they need to let them go. They also claim it is not clear
from the legislation at what point consultation on redundancies
should start or end. TUPE. These rules implement a European
directive and protect employees’ terms and conditions of
employment when a business is transferred from one owner to
another. These rules offer important protections but some
businesses believe that they are `gold plated’ and overly
bureaucratic.
The Government will start reviewing these areas this year. It
wants to ensure that the regulations are fit for purpose, and
legislation will not necessarily be the route to implement any
change if there is a case for reform.
As part of the review of employment law consultations have
recently closed on simplifying the Employment Tribunal system and
extending the period before an unfair dismissal claim can be
brought. An independent review of the system for managing sickness
absence has been commissioned and a review of the compliance and
enforcement regimes for employment law has been launched.
The Government believes that a flexible labour market is not
simply about making life easy for employers. It is also determined
to help people who want to work. Next week it will launch a
consultation on plans to extend the right to request flexible
working to all employees and introduce a new system of shared
parental leave from 2015 – to make it easier for parents to work
whilst bringing up a family.
Notes to editors:
1. Since the Employment Law Review was announced last summer the
Government has:
Consulted on a package of reforms to the employment tribunal
system, aimed at encouraging earlier resolution of disputes in the
workplace and reducing the number of tribunal cases (which are
costly for employers, employees and Government)launched an
Employer’s Charter that reassures employers about what they can
already do to deal with staff issues in the workplacelaunched a
review of the compliance and enforcement regimes for employment
law, with the aim of streamlining the systemremoved the Default
Retirement Age, thus removing significant paperwork obligations
for employers and bringing wider benefits to the economy, making
it easier for older people to continue workingannounced the
proposed abolition of the Agricultural Wages Board and
Agricultural Minimum Wage, pending consultation and the
Parliamentary processcommissioned an independent review jointly
with DWP (from David Frost and Dame Carol Black) of the system for
managing sickness absencerepealed the planned extension of the
right to request flexible working to parents of 17 year
oldsdecided not to bring forward the dual discrimination provision
in the Equality Actnot extended the right to request time to train
to companies with fewer than 250 staff.
2. The Government will also look for ways to simplify the burden
of paperwork, particularly in the areas of flexible working and
parental leave.
3. The Government is committed to stopping the deluge of
regulation that is restricting businesses and wants to be the
first Government in history to reduce the burden of regulation
over its lifetime. It has already set up a robust challenge
process to ensure that new regulation is a last resort and is
currently running the Red Tape Challenge campaign
(www.redtapechallenge.cabinetoffice.gov.uk) which asks the public
for their views on all 21,000 regulations on the statute book.
4. BIS's online newsroom contains the latest press
notices, speeches, as well as video and images for download. It
also features an up to date list of BIS press office contacts. See
http://www.bis.gov.uk/newsroom for more information.
Contacts:
BIS Press Office
NDS.BIS@coi.gsi.gov.uk
Joe Upton
Phone: 020 7215 5959
Joe.Upton@bis.gsi.gov.uk