Enterprise and Regulatory Reform Bill

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Following the Queen’s Speech in May, the Enterprise and Regulatory Reform Bill has now been published. We have listed below the highlights:

ACAS conciliation

The Bill would create a duty for ACAS to conciliate pre-claim (currently there is only a discretionary power to do so). ACAS would need to follow the following four-step procedure for most types of claim:

  • Step 1 – Before lodging a claim a prospective claimant must send to ACAS “prescribed information” in the “prescribed manner” (details to be provided).
  • Step 2 – ACAS must then send a copy of the information to an allocated ACAS conciliation officer.
  • Step 3 – The officer must try to promote a settlement within a “prescribed period” (likely to be one month).
  • Step 4 – If a settlement is not reached, either because settlement is not possible in the conciliation officer’s view or the prescribed period expires, the officer must issue a certificate to that effect. A claimant may not submit a tribunal claim without this certificate.

Any period spent complying with the pre-claim conciliation obligations will be disregarded when calculating the time periods for bringing a claim.

The introduction of compulsory pre-claim conciliation is aimed at reducing the burden on the tribunal system. However, this is only likely to place further burden on an overstretched ACAS. It is also doubted that this would actually result in many claims being settled – after all, it is difficult to see many parties agreeing to settle until they have seen the strength of the claim and defence (which would come after the proposed concilation period).

Financial penalties

Tribunals will be given a discretionary power to impose financial penalties on employers who have lost a tribunal claim where the breach of the employment right in question had ‘one or more aggravating features’. What constitutes an aggravating feature will be for the tribunal to decide but the size of the employer, the duration of the breach, any malicious intent and whether the breach is a common one with the employer is likely to be taken into account. The penalty (payable to the government) would be 50% of the compensation awarded by the tribunal, subject to a minimum of £100 and a maximum of £5000. If the employer pays the penalty within 21 days, it will be reduced by 50%.

Rapid resolution scheme

The Bill introduces a ‘rapid resolution’ scheme to deal with some simple or low value tribunal claims determined by a ‘legal officer’ without the need for a hearing. The types of claim are likely to include claims involving notice / holiday pay etc. The parties will need to consent to this scheme.

Public interest test for whistle blowing claims

There is currently no specific requirement that a qualifying disclosure must be made in the public interest. This means workers who ‘blow the whistle’ about breaches of their own contract of employment are protected under the whistle blowing legislation. The Bill closes this loophole – it will require a claimant to show that they believed that their disclosure was made in the public interest and that their belief was reasonable in the circumstances.

Compromise agreements

The Bill proposes to rename compromise agreements as settlement agreements. The bill does not cover previous government proposals of simplifying compromise agreements, for example by introducing standard text and guidance.

For more information, help or advice please contact Tim Davies on 0191 211 7927 or email [email protected].