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Reviewing the Enterprise and Regulatory Reform Bill

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The Enterprise and Regulatory Reform Bill is one of two bills that the Department for Business Innovation and Skills has recently proposed, ostensibly it is aimed at strengthening the business environment in order to promote economic growth. Of particular interest are the reforms that are likely to be made to employment law. A number of these reforms take their cue from the controversial 2011 Beecroft Report. It is yet to be seen which parts of the bill are going to be enacted into law but it is useful to consider the proposals that are currently on the table.

One of the least controversial proposals is the requirement for a mandatory period of mediation, through ACAS, before a claim is brought before the Employment Tribunal. On further analysis this will not involve a significant change to the employment law landscape. In accordance with the overriding objective the vast majority of claims go through a period of mediation before they are heard and the proposed law simply formalises the process and places it on the statute book. It is to be hoped that employers and employees alike seek legal advice prior to mediation in order to avoid unnecessary losses.

Also included in the bill is legislation seeking to re-define whistle blowing laws in order to narrow the scope of protected disclosures. The proposed legislation states that only disclosures which are in the public interest are capable of being classed as protected disclosures. The full effect of this proposal will not be known until the courts define what is to be classed as in the public interest under the new legislation. If this legislation is enacted employees are unlikely to be able to make a protected disclosure relating to their own contracts of employment. 

The most controversial proposal is the potential creation of a no fault dismissal procedure for micro businesses. Under this law businesses with under 10 employees will be allowed to dismiss an employee without the risk of an unfair dismissal claim being brought against them before the Employment Tribunal. Due to the controversial nature of this proposal it is currently being consulted on and is not certain to be enacted. While this law may have some benefit to employers it does represent a significant erosion of the rights of employees and as such is likely to come under a fair amount of scrutiny before parliament.

The Department for Business Innovation and Skills have decided not to take forward recommendations, contained in the Beecroft Report, that micro businesses are exempted from numerous employment laws and that compensatory awards for discrimination are capped. The legislation relating to the extension of the time an employee must work before being eligible to bring an unfair dismissal claim, from one year to two, is already in effect.

Whatever makes it onto the statute book it is a certainty that legal professionals, businesses and employees are going to have to prepare themselves for the upcoming changes.

By employment law specialist, Ryan Bradshaw