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13th December 2011

The Chancellor’s 2011 Autumn Statement: Employment Law Implications

The Chancellor of the Exchequer, George Osborne MP, delivered his Autumn Statement on 29 November 2011, containing a package of measures intended to stimulate economic growth. To a large extent, his statement summarised a number of previously-announced proposals on employment law, the details of which are outlined below:-

Unfair dismissal qualifying period – The Government will increase the qualifying period for unfair dismissal from one year to two years from April 2012.

Employment tribunal claims – The Government will require all potential claimants to submit their employment tribunal claim to the Advisory, Conciliation and Arbitration Service (ACAS) so that early conciliation can take place.

Determination of claims – The Government will look at whether and how a ‘Rapid Resolution’ scheme to provide quicker, cheaper determinations in low-value, straightforward claims (such as holiday pay) could be introduced as an alternative to the current employment tribunal process.

Transfer of Undertakings (Protection of Employment) (TUPE) regulations – The Government has launched a call for evidence on the effectiveness of the TUPE regulations protecting employees’ rights and smoothing the process of business restructuring. Should the balance of evidence call for possible changes to the current regulations, there will be a formal consultation on any proposed changes in 2012.

Collective redundancy rules – The Government has called for evidence on the collective redundancy rules, including the consequences of reducing the current 90-day consultation period for over 100 redundancies to 60, 45 or 30 days.

Mediation – The Government will work with industry and key stakeholders to change attitudes to mediation and embed it as an accepted part of the dispute resolution process. As a first step, the Government will explore with large businesses in the retail sector how they might share their mediation expertise with smaller businesses in their supply chain. The Government will also pilot local mediation networks for small and medium-sized enterprises (SMEs).

Financial penalties – The Government will introduce a provision for employment tribunals to levy a financial penalty on employers found to have breached employment rights (payable to the Exchequer), but will allow judges the discretion about whether to exercise this power to ensure that employers are not penalised for inadvertent errors.

Compromise agreements – The Government will develop a model agreement for use by smaller businesses, consult on a legislative change to enable compromise agreements to cover all existing and future claims, and rename agreements as ‘settlement agreements’.

Protected conversations – Subject to consultation, the Government will introduce a system of ‘protected conversations’ which will allow employers to have a conversation about any employment issue with their employees.

Employment tribunal fees – The Government will shortly publish a consultation on the introduction of fees for anyone wishing to take a claim to an employment tribunal.

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