Too much for ACAS?

Two specific proposed changes will mean a great deal of extra involvement for ACAS but will an overstretched organisation be able to cope and will the plans really mean a better process? We have set out the key principles of these proposals below.

Pre-termination Negotiation

Last year the Government mooted a proposal for what was going to be called “Compensated no – fault dismissals”, aimed at encouraging early settlement. The concept was binned but the Enterprise and Regulatory Reform Bill (the Bill) contains details of the idea where Tribunals will not be able to consider one “Pre-termination negotiation” when considering the fairness of a dismissal.

This means that employers could sit down with an employee who they are looking to dismiss, raise a performance or capability issue and include within that discussion a proposal to end their employment on negotiated terms. This conversation would then be protected and would not be able to be used as evidence that a subsequent dismissal was predetermined, regardless of procedural obligations in any later unfair dismissal proceedings.

The reality of this proposal is that employers who are looking to resolve a difficult situation are likely to be able to have a bit more of a frank discussion with their employee however, employers must still tread with some caution particularly as the way that the Bill is currently drafted would mean that the details of the proposal to end employment and the terms negotiated are only inadmissible in ordinary unfair dismissal proceedings. The fact and content of the offer or discussion may be referred to in relation to other claims such as automatic unfair dismissal, breach of contract or discrimination.

Employers must also be aware that they must not place “undue pressure” on the employee and that they will not receive any protection where it is considered that the employer’s behavior has been “improper”. The difficulty with the way in which it is currently worded is that there is no definitive explanation of what improper behaviour would be although it is going to be defined in a further ACAS publication although further consultation is currently still underway in this regard. Employers should be aware however that the expected change is due to come in to force in the summer.

Greater ACAS involvement pre issue?

The Government intends to introduce a requirement for most types of potential Tribunal claims to be lodged initially with ACAS who will then offer the parties an opportunity to engage in early conciliation with a view to relieving some of the claims going to the Employment Tribunal.

There will be no obligation to actually accept the offer of early conciliation and the requirement is merely to contact ACAS rather than to actually partake in pre-claim conciliation.

In January 2013 the Government issued its consultation on how the process would operate in practice and it closed on the 15th February. Under the proposed two stage process, the way that it would work is that there would be an early conciliation support officer who would make “reasonable efforts” to contact a Claimant, obtain basic information and outline the conciliation process. ACAS would then issue a certificate confirming the Claimant complied with their duty to contact ACAS even if they did not wish to participate in conciliation. The claim would then be able to be presented to the Tribunal.

If the proposed Claimant did wish to participate in early conciliation then the matter would be passed to a conciliator who would contact both the parties. If it was the employer who did not wish to participate then the compliance certificate would immediately be issued and a claim lodged at Tribunal.

If the employer did agree to conciliation then there would be a period of up to 1 month to facilitate a settlement. It is not clear what would happen in the event that a Claimant lodged tribunal proceedings immediately perhaps due to the approaching expiry of a time limit.

Despite ACAS being asked to write definitions and become more active, there will be no additional funding. As anyone with previous experience of ACAS knows, they are already overstretched and so it is impossible to see how they will deal with further increases in workload.

No need to share quite so early but beware of redundancy change

The Department for Business Innovation and Skills had originally announced a number of employment law changes which were due to come into force in April. With just a few weeks left however they have announced that some dates will now be set back.

We blogged last week about the new employment status of Employee Shareholder which had been due to start in April 2013. This is no longer going to happen and instead has been pushed back to the autumn, most likely October.

To proposed new time table is:

Spring 2013

Change to collective redundancy

Consolidation of National Minimum Wage Regulations

Summer 2013

Settlement Agreements to be made easier

12 months' pay cap on unfair dismissal compensatory awards

Revised Employment Tribunal Rules
New Tribunal fees
Whistleblowing improvements
Portable DBS (previously CRB) checks

Autumn 2013
New employee shareholder employment status
TUPE regulation reforms

Changes to Redundancy from April

From the 6th April 2013 if employers are making a number of redundancies they should be aware of the new consultation periods.

If it is envisaged that 100 or more employees are going to be made redundant within a 19 day period a minimum period of consultation of 45 days (as opposed to 90 days) will be required. The existing 30 day minimum period where at least 20 but fewer than 100 employees will be made redundant will remain.

Employers must note however that the current 90 day maximum award for a “protected award” where the employer fails to comply with its duty to consult will not be reduced.

A non statutory code of practice will also be issued which is likely to establish guidance on the meaning of the word “Establishment” which has caused a great deal of claims in the Employment Tribunal.

With an ever increasing number of large high street names making large redundancies or closing, employers should keep an eye out for the outcome of the Employment Appeal Tribunals guidance in relation to the collapse of Woolworths and whether an individual store amounted to a separate establishment.

Redundancies appear to be an ongoing issue. Very often employers are aware that redundancies can be an expensive but necessary option to avoid closure. Employers must make sure that they get it right or additional costs and the possible loss of a business is inevitable.

Will you share with your employees?

From April all employers will have the opportunity to share their profits with their employees via the Employee Shareholders Scheme. The intention of the scheme is to encourage small and medium sized to take on staff. Under the scheme employee shareholders will become a new employment status and will mean that in exchange for shares in the company, employees will give up certain legal rights.

Employees will give up the right to make a claim for unfair dismissal, statutory redundancy pay, the right to request flexible working and also the statutory request in relation to study or training. In addition they will need to give 16 weeks notice to return early from additional maternity leave where at the moment it was currently at 8 weeks.

Employees must be given at least £2,000 in shares and the benefits to the employee are that the shares will be exempt from capital gains tax up to a maximum threshold of £50,000.

For employers, it may be an attractive option as two of the most significant employment rights, namely the right to claim unfair dismissal and statutory redundancy payments are being signed away. Automatic unfair dismissals such as being dismissed on the grounds of discrimination or whistle blowing will remain protected.

The big question however is how many employers are prepared to share their profits with their employees and how many employees will actually be advised to give up their employment rights. It is unlikely that the Employee Shareholders Scheme will be attractive to many small employers. Employees who think that they may have a say in the running of the company should be cautious of employers creating shares without a vote. Overall it looks as though this is going to be an unattractive proposition to employers and employees alike.