Employment Law Octoberfest?

It’s here again, the second of the two days in the year when the government introduces new legislation and regulation and increases rates and allowances. Instead we could have been in Munich having some real fun.

Saturday saw the introduction of the long-awaited (and feared) Agency Workers Regulations.  Opinion on them varies between them being a fundamental step in ensuring fairness in the workplace to one of the greatest threats to the UK’s reputation as being a friendly place for businesses to do, well, business.  More on this in a later blog post, but here is the BBC’s report on it.

 In other news, the government has finally published some details of how it intends to reform employment law procedure.  The political football that is the minimum qualification period for unfair dismissal has just been given a big punt upfield back to two years.  Actually a yo-yo might be a better analogy because we’ve had various qualification periods over the years from 6 months up to two years, then back down again, with some little twists and turns along the way.  The aim is to make life easier for employers and reduce the number of unfair dismissal claims.  The government claims it will save business £6 million per year and will mean 2,000 fewer ET claims per year. As I’ve said before this will not achieve that aim: disgruntled employees will simply look for discrimination and whistleblowing claims to bring instead, neither of which have minimum qualification periods.  And it is discrimination claims that tend to worry employers (and cost them more) than unfair dismissal.   I suspect this move will prove to be an own goal, one that even the less than fabulous back four at Arsenal, wouldn’t have conceded.

The other major announcement is that fees are to be introduced in the ET from April 2013 for issuing claims.  A fee of £250 will be required for issuing the proceedings (it is currently free) and a further £1,000 if the case goes all the way to a final hearing.  The fees will be refundable if the Claimant wins.  “Poor” claimants will be excluded from this requirement, but I haven’t seen a definition of how poor someone has to be to be exempt from the fees. For a strong analysis of why this is likely to be counter-productive for business, read Daniel Barnett’s blog post here.

These two changes have been brought about by the government’s perception that employment law is to skewed in favour of employees and places too big a burden on business.  However, I can’t help but feel that this is a convenient smokescreen for the government. The aim, as stated in the Department for Business Innovation and Skills document “One In One Out: Second Statement of New Regulation”  is to transfer the cost burden from tax payers to the users of the system” ie to make the ET system self-financing perhaps?  As has long been government policy with the Courts? Don’t forget that the Court and Tribunal Services are now merged, so it is very handy for the government to be able to claim that it is trying to protect business by introducing a reform that really is aimed at saving itself money.

Darren Newman in the Burt’s View blog here states that the Tribunal system isn’t geared up for receiving large sums of money (and having to refund them as well) and faces a major challenge in setting the system up. One of the reasons (the main one perhaps?) the previous government abolished payments into court in favour of Part 36 offers was to allow it to reduce the size of the Court Funds Office (which previously administered the payments in system).  Another own goal?

On the unfairness of having such a large issue and hearing fee Kerry Underwood (former Employment Judge) tweeted that

What is offensive about Osborne's proposals re court fees is that they discriminate against the poor, not those with weak cases #ukemplaw
Kerry Underwood


Emp Tribs can already order claimants to pay £500 deposit as condition of continuing, so issue fee hits only reasonable claims. #ukemplaw
Kerry Underwood

That is the key to removing the speculative claims from the system – proactive and robust case management by ET judges, not by introducing fees that may prevent people from bringing deserving claims.  I’m all for keeping out vexatious litigants out of the system, but this could prove to be  a step too far.

Darren Newman also draws attention to the government’s Red Tape Challenge, which begins thus;

 “Employment Related Law aims to protect employees from unfair practices and make staff and employers clear about their rights and responsibilities – and that remains a priority. But when regulation becomes over complicated and restrictive it can have the opposite effect and make it difficult for business to create new jobs.”

So, we can now look forward to a further review of employment laws – to include removing the “gold plating” from EU inspired legislation and a “rowing back” of individual rights? It will probably be another case of smoke and mirrors: the government has little scope for altering EU legislation.

Moving on to other news, the Minimum Wage has increased, as follows;

  • the hourly rate applicable to workers over 21 years of age will be raised from £5.93 to £6.08;
  • for workers aged 18-21, the hourly rate will be raised from £4.92 to £4.98;
  • for workers aged under 18, the hourly rate will be raised from £3.64 to £3.68;
  •  for apprentices, the hourly rate will be raised from £2.50 to £2.60

Retirement was also abolished on Saturday.  Or to put it another way, termination of employment on the basis of compulsory retirement at the default retirement age (65) has gone. It’s been on its last legs since last April when the abolition process commenced.  From now on employers can’t terminate someone’s employment because of their age unless such a step can be objectively justified. That, however, might not be as easy as it sounds. In future, if Doris from accounts is past her sell by date employers will have to assess her performance and will only be able to terminate on the basis of capability (or lack of) or risk facing a claim for age discrimination.

So, the uncertainty over employment law reform is set to continue as more reviews drag on.  It should provide plenty of material to blog about if nothing else.

Time for a beer in the meantime then?





Michael Scutt, Employment Solicitor 

Employment solicitor with Crane and Staples, Welwyn Garden City, Hertfordshire. Blogger & writer. I like cycling, cricket, football and history.