UK: Employment law reforms enacted

The Enterprise and Regulatory Reform Bill finished its passage through Parliament and received Royal Assent on 25 April 2013.  BIS has also published commencement dates for various parts of the Act.  The most significant employment law provisions are as follows:

• from 25 June 2013, the qualifying period for unfair dismissal will not apply where the main reason for dismissal is the employee's political opinions or affiliation
• changes to whistleblowing protection will also apply from 25 June 2013: employers can be vicariously liable for detriment by colleagues, a new public interest requirement is imposed and the good faith test removed (though bad faith can reduce compensation). Employers should update their whistleblowing policies and consider staff training
• protection for pre-termination negotiations (to be inadmissible in ordinary unfair dismissal claims) – planned for summer 2013
• power to impose an additional cap on the unfair dismissal compensatory award – planned for summer 2013
• repeal of the third party harassment provisions in the Equality Act 2010 (unknown implementation date)
• abolition of discrimination questionnaires (unknown implementation date)
• financial penalties for losing employers (likely 2014)
• prohibition of caste discrimination (added to the Bill at a late stage by the House of Lords; likely 2014/15)
• power to introduce tribunal discretion to order equal pay audits (not before 2014).

The Growth and Infrastructure Bill has also received Royal Assent. The provisions introducing a new employee shareholder status (planned for 1 September 2013) were the subject of much debate and disagreement, but remained in the final Act following concessions won by the House of Lords. These included:

• job applicants who refuse a job offered only on the basis of employee shareholder status will no long lose jobseeker's allowance
• employers offering the new status must provide the individual with a statement explaining the employment rights being sacrificed and the rights attaching to the shares
• the employer must pay the reasonable costs of the individual taking independent legal advice on the offer, whether or not the offer is accepted
• there will be a seven day cooling off period from the day legal advice is received, to allow the individual to back out.

Further details of the new status are set out in our earlier private equity briefing and blog posting.

The Queen's Speech on 8 May included little of employment law interest.  The announcements included increased fines for businesses employing illegal workers, a £2,000 employment NIC allowance for all businesses, measures to stop the use of offshore companies to avoid paying NICs, and a Deregulation Bill removing the ability of employment tribunals to make wider recommendations in successful discrimination cases.

The Children and Families Bill (providing for shared parental leave) has been carried over to the 2013-14 parliamentary session.