On 23 November 2011, the UK Government announced the biggest potential changes in decades to employment law and the procedures used in specialist employment courts ("Employment Tribunals"). If implemented, they will have far-reaching consequences for employment law.

The plans are set out in the UK Government's "Response to the Consultation on Resolving Workplace Disputes". Announcing these radical proposals, the UK's Business Secretary, Vince Cable, asserted that the Government's objective was: "to safeguard workers' rights while deregulating to reduce the onerous and unnecessary demands on businesses". 

The main proposals are:

• From April 2012, employees will need to have been employed for two years instead of just one in order to qualify for unfair dismissal rights (rights which give employees statutory protection against termination).
• Compulsory lodging of all claims through ACAS (a Government-run conciliation service) for attempted mediation before they can be filed with Employment Tribunals.
• Consulting in 2012 on the introduction of "protected conversations" to allow employers to have off-the-record discussions with employees about employment issues at any time, which could not then be used as evidence in litigation.
• Consulting on ways to simplify termination agreements – currently these require cumbersome wording in order for releases by employees to be binding.
• Commissioning a independent judicial review of the Employment Tribunal procedural rules by Mr. Justice Underhill (the President of the Employment Tribunal) with a view to modernising them.
• Publishing a consultation on two options for the introduction of Employment Tribunal fees. The first would require an initial fee to lodge a claim and the second, a fee to proceed to hearing. The second option would require those seeking an award of in excess of £30,000 to pay more to bring a claim. Currently there are no fees.
• Introducing a discretionary right for an Employment Tribunal to levy penalties on employers found to have breached employment rights.
• Considering options for a "rapid response scheme" to enable employment claims to be settled quickly and cost-effectively – this will be an alternative to using the Employment Tribunals.
• Revising whistleblowing legislation so that, unlike the current position, a worker will no longer have protection where the wrongdoing about which they complain is a  breach of their own contract.
• Seeking views on a proposal to introduce "compensated no-fault dismissal" for businesses employing 10 or fewer employees. This would mean that such business could lawfully dismiss employees for non-discriminatory reasons without having to follow any procedures by making a fixed payment to be set by statute.
• Examining ways of "slimming down" existing dismissal processes to make them simpler, quicker and clearer – including introducing supplementary guidance for small businesses.

The Government also will:

• Review the Agency Workers Directive in 18 months' time with a view to simplifying it.
• Examine the rules governing "collective redundancies" (where consultation with specially elected employee representatives is required when 20 or more redundancies are being proposed within a 90-day period). It will explore the consequences of reducing the current consultation period.
• Look at ways to simplify the current Transfer of Undertakings (Protected Employment) Regulations 2006 (legislation giving employees protection in certain circumstances where their employment transfers from one employer in the context of a business transfer, such as a sale or an outsourcing) while still ensuring appropriate levels of protection to employees.

The Government's next steps will be to bring forward a Bill as soon as the Parliamentary timetable permits to implement proposals that require primary legislation. It also proposed to consult on the proposals relating to compensated no-fault dismissals for micro-businesses, compromise agreements, the reduction of the 90 days' collective redundancy consultation period and the introduction of a "rapid response scheme".

Vince Cable concluded his address by stating that changing legislation is only the beginning. The Government wants to see a wider change in the employment relations culture: "A culture that establishes dialogue rather than confrontation as the norm between employers and employees".

If you have any questions relating to the Government's proposals, please contact our London Employment Team.