The Enterprise and Regulatory Reform Act 2013 received Royal Assent on 25 April 2013. The Act introduces various changes including a section dedicated to employment law. Various commencement dates have been announced detailing when the employment provisions will come into force – some of these are imminent.
The following reforms will come into force on 25 June 2013:-
- New provisions on whistleblowing. If the principal reason for a dismissal is that the worker made a protected disclosure, then the usual two-year qualifying period to claim for unfair dismissal does not apply. Similarly, the maximum cap on compensatory awards for unfair dismissal is removed in such cases. The previous requirement that a protected disclose must be made in good faith will be abolished and replaced with the ability for tribunals to reduce compensation by up to 25% where bad faith is established. A requirement will also be imposed requiring employees seeking whistleblowing protection to establish that they had a reasonable belief that the disclosure was made in the public interest.
- The two-year qualifying period to claim for unfair dismissal claim will not apply where the reason for the dismissal is, or relates to, the employee’s political opinions or affiliation (applicable for dismissals on or after 25 June 2013).
- Simplifying the procedures and costs of deciding tribunal cases. Although it was not specified in the announcement which provisions this covers, it is likely to include the introduction of a “rapid resolution” scheme where legal officers will have the power to hear simple claims. In addition, all hearings at the Employment Appeal Tribunal (EAT) will be heard by a judge sitting alone. Tribunals will also be granted power to make deposit orders against specific parts of a claim or response.
- Financial penalties for breach of workers’ rights. If an employment tribunal decides that an employer has breached a worker’s rights and it concludes that the breach has an “aggravating factor”, the tribunal can order the employer to pay a penalty of between £100 and £5,000 (payable to the Secretary of State, not the worker, with an early payment discount available).
- Compensatory awards. The annual index-linked increase to the statutory cap on compensatory awards currently takes place in February. The Act provides that this annual change will now take place on 6 April. The next increase will be on 6 April 2014. The Secretary of State is given the power to reduce the cap on compensatory awards (currently £74,200) to 12 months’ pay.
On 29 July 2013, the fee structure for Employment Tribunals and the EAT will be implemented as will various changes to the employment tribunals rules of procedure.
There are other key reforms contained in the Act for which commencement dates have yet to be announced. These include the introduction of confidential settlement discussions, renaming compromise agreements as settlement agreements, early ACAS conciliation and the imposition of vicarious liability on employers where a worker is subjected to a detriment by a co-worker for making a protected disclosure. It is expected that these will come into force in either October 2013 or April 2014.Jack Boyle Solicitor – Employment Law