Coalition Government Eyes Faster And Cheaper Ways To Resolve Employee Disputes

Business Secretary Vince Cable last week launched a number of proposals aimed at reforming employment law and making it easier for businesses, especially SMEs, to resolve employee disputes in a faster and cheaper way.

This included plans to introduce a rapid resolution scheme and obligatory ACAS conciliation, which will enable many disputes to be resolved before they get to the stage of costly Employment Tribunals.

Launching the proposals in a speech to the Engineering Employers’ Federation last Wednesday, Vince Cable, said, “We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business. Tribunals should be a last resort for workplace problems which is why we want disputes to be solved in other ways.”

In order to understand the concerns of employers and employees, the government will be launching various consultations and ‘calls for evidence’ on the proposals over the coming months. Some of these changes will require the government to introduce primary legislation, subject to the Parliamentary timetable.

The proposals include:
• a requirement for all employment disputes to go to ACAS to be offered pre-claim conciliation before reaching the employment tribunal stage
• options for a ‘rapid resolution scheme’ for more simple cases to be settled within three months
• a ‘call for evidence’ on whether ‘micro-firms’, with fewer than 10 employees, can dismiss staff without their agreement and avoid tribunals if they pay a compensatory package
• working with ACAS to slim down existing dismissal procedures
• publishing a call for evidence on proposals to simplify the Transfer of Undertakings (Protection of Employment) – TUPE – rules
• a consultation on ‘protected conversations’, which would allow employers to have frank discussions about issues such as retirement and poor performance with workers, without fear that they could be used as evidence in a tribunal
• a ‘call for evidence’ on the length of time required for a consultation period on planned redundancies, with the possibility of the current 90 day period, being reduced to 30.

Noting that the UK already has one of the most effective and highly regulated labour markets among developed economies, Mr Cable said he wanted to help firms expand without making existing staff feel insecure.

He added that, “A recent survey of SMEs, commissioned by BIS, revealed that the proportion regarding regulation, including employment regulation, as the main obstacle to business success, was only 6% – and it has halved over the last two years. We still have a way to go, clearly, but we are moving in the right direction and we are committed to addressing the remaining concerns.

In particular, we want to remove the perverse incentives in current employment framework that can dissuade responsible employers from hiring new staff for fear of the costs and the time incurred if it doesn’t work out.”

The Business Secretary also confirmed the proposal to make people work for two years before they could make a claim for unfair dismissal. This would be brought in from April 2012. The current qualifying period is one year.