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Employment Law Update – July 2013

Employment Law Update – July 2013

In this issue we focus on the important changes to employment law that will come into force on 29 July 2013, and we explore the future HR trends of early ACAS conciliation and caste discrimination.

  1. 1.      NEW: Q&A – Fees in the Employment Tribunal – from 29 July 2013

From 29 July 2013 fees will be payable in respect of any claim presented to an Employment Tribunal. A fee will be payable when issued, and also before a hearing. The amount of fees payable depends on whether the claim is a ‘type A’ claim or a ‘type B’ claim (referred to in further detail below). There are additional fees for applications and also for judicial mediation (£600).

What are the types of claims?

Type A claims include: statutory redundancy payments; equal pay; unlawful deductions from wages and breach of contract. The issue fee for Type A claims are £160; and the hearing fee is £230.

Type B claims include: unfair dismissal, discrimination and whistleblowing. The issue fee for Type B claims is £250, and the hearing fee is £950.

Which fee is payable? The fee payable will be that which relates to the highest level claim. For example, a claim containing a complaint of unpaid wages (Type A) and a complaint of unfair dismissal (Type B) would be charged one fee at the Type B rate.

How will fees be paid? Fee payments will be made via the online service (credit card/debit card) or will be otherwise collected through centralised processing centres.

What if I bring a claim before 29 July 2013? (Transitional provisions)  Only claims made to the Employment Tribunal on or after 29 July 2013 will attract fees. Any claim in the system before 29 July 2013 will not attract fee payments.

DKLM CommentWe predict that there will be a push towards Alternative Dispute Resolution (ADR), most notably mediation, as a way of resolving employment related disputes.  Mediation can provide a way of dealing with a dispute which is quicker and cheaper than going to the Employment Tribunal. Two of our partners, Philip Henson and Jeremy Kleinfeld, are accredited mediators. Please contact us, if we can be of any assistance.

  1. 2.      NEW: Employment Tribunal Rules of procedure – from 29 July 2013

The main changes to the rules are:

  • The introduction of a sift stage where an Employment Tribunal will review the case on paper after receipt of the Claim and Response with a view to making directions or, if appropriate, considering whether to strike out a weak Claim or Defence.
  • The Employment Tribunal President is to issue Presidential Guidance to aid good practice and consistent approach across Tribunals.
  • Revised ET1 and ET3 Forms – The Claim and Response forms have been redrafted although not yet published.
  • A new rule to provide for a lead case mechanism in multiple cases or where cases raise the same point of law which brings Employment Tribunals in line with other Tribunals.
  • A combining of separate case management discussoins and pre-hearing reviews into a single preliminary hearing.
  • Cost Awards over £20,000.00 – These will no longer have to be referred to the County Court for detailed assessment.

DKLM Comment – It is hoped that the new sift phase will prevent weaker claims from getting through the net. We can expect to see Employment Judges flexing their case management powers and we expect an increase of technical appeals to the Employment Appeal Tribunal.


  1. 3.      NEW: Unfair dismissal compensation cap – from 29 July 2013

Subject to parliamentary approval, from 29 July 2013 a new cap for the compensation element of Unfair Dismissal will be introduced. The Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013 will set the cap at the lower of the current cap (£74,200) or one year’s gross pay.

  1. 4.      NEW: Compromise agreements renamed as “settlement agreements

Compromise agreements are to be rebranded as “settlement agreements”. A recent ministerial statement explains that the intention is to build upon the existing system (compromise agreements) to facilitate their increased use, making it easier to make offers of settlement outside of dispute situations; although we recommend a cautious approach to such offers.

A new measure in the Enterprise and Regulatory Reform Act 2013 makes the offer of a settlement agreement inadmissible as evidence in an unfair dismissal claim. The legislative change and a new statutory code of practice (including template letters and model agreements) will be brought into effect on 29 July 2013.

  1. 5.      Future HR Trends – ACAS early conciliation – expected April 2014

ACAS currently has a power to start conciliation with an aim to promoting settlement following a submission of an Employment Tribunal claim.  ACAS also provides a voluntary pre-claim conciliation service which parties can use before a Tribunal claim has been submitted.

As part of the government’s plans to make the Tribunal system more economical, from April 2014 there will be a new mandatory duty on ACAS to assist the parties and attempt conciliation before a claim is submitted.

The proposed 4 steps of early conciliation

It is proposed that there will be four steps to the new early conciliation procedure:

  1. 1.      Before lodging a claim to begin “relevant proceedings“, a prospective claimant must send ACAS “prescribed information” in the “prescribed manner“. “Prescribed” in both of these instances means prescribed by regulations.
  2. 2.      ACAS must then send a copy of the information to a conciliation officer.
  3. 3.      The officer must try to promote a settlement within a “prescribed period“(most likely one month).
  4. 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 claim without this certificate. The officer may continue to promote settlement after the period has elapsed.

6.   Future HR Trends – Caste discrimination – expected April 2015

The Equality Act 2010 prohibits race discrimination, harassment and victimisation in the workplace. The definition of “race” in the Equality Act 2010 is non-exhaustive: it “includes … colour, nationality, ethnic or national origin“. Therefore, this allows scope for arguing that other factors, such as caste, are already included. Prior to the Equality Act 2010 coming into force, the European Human Rights Court (EHRC) was of the view that caste fell within the concept of race for discrimination purposes. However, a UK Employment Tribunal case held that it was not so covered. In the absence of appellate case-law the position remains unclear.

The government indicated to the House of Commons that it intends to bring the order into force within the next two years (by April 2015). However, the government indicated to the House of Commons that it would aim to bring it into force within one to two years (i.e. by April 2015). It was indicated that an order will be made “after consultation“.

Contact us

For further information please contact Philip Henson, Partner and Head of Employment Law – p.henson@dklm.co.uk

DKLM LLP City House, 3, Cranwood Street, London, EC1V 9PE (DX: 36601 Finsbury)

Tel: 020 7549 7888


Disclaimer: This update is published by DKLM LLP. Please note that the information and any commentary on the law contained in this update is provided free of charge for information purposes only. The information or commentary does not, and is not intended to, amount to legal advice. DKLM LLP accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this update. Further specialist advice should be taken before relying on the contents of this summary. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form without the prior permission of DKLM LLP.

DKLM LLP is a limited liability partnership registered in England and Wales. Authorised and regulated by the Solicitors Regulation Authority. © DKLM LLP


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BIS publishes draft model documentation for an employee-owned company

BIS publishes draft model documentation for an employee-owned company

The Nuttall review recommended the development of a set of model documents for employee-owned companies. The Department for Business, Innovation and Skills (BIS) has recently published for comment a draft pack of model documentation for an employee-owned company. These documents were developed by Pett, Franklin & Co LLP, and include:

  1. A guide to the constitution of an employee-owned company;
  2. Model Articles of association of an employee-owned company;
  3. A model trust deed of an employees’ share trust, with notes on the model trust deed; and,
  4. Model Articles of Association of a trustee company (a guarantee company).

The guide sets out how individual employees may benefit, and a summary chart of proposed ownership and governance structure.

The guide also proposes an Employees’ Council which would have both a formal legal role in the selection of employee directors and of employee trustee directors of the trust and a role in setting standards by which the company operates.

The guide envisages that the employees’ council will meet at least twice in every calendar year; and that any resolution of the employees’ council calling upon the directors to take any action (or refrain from any action) in relation to the management of the business of the company, shall be advisory only and the directors would not be bound to act in accordance with any such resolution (or at all) if, in their opinion, to do so would not be in the best interests of the company or its shareholders.

Link to BIS draft documents – http://goo.gl/mY3pE

Philip Henson

Partner and Head of Employment Law, DKLM LLP 



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Consultation on Fee Remissions (waivers) for the Courts and Tribunals

Consultation on Fee Remissions (waivers) for the Courts and Tribunals


  • A new Government consultation proposes a stringent two-stage test for fee remissions (waivers);
  • Fee remissions will be introduced to employment tribunals and the Employment Appeal Tribunal (EAT) for the first time later this year.

All fee charging courts and tribunals operate a system of remissions to ensure that individual applicants who are unable to afford fees are not denied access to their services. The Ministry of Justice (MOJ) has recently published a consultation on a wide-ranging reform of the fee remission (waivers) system for the courts and tribunals.

As fees are being introduced to the employment tribunals and the EAT for the first time in autumn of this year, the subject of fee remissions may be a new concept to many employment law practitioners and HR professionals.

The Proposals

The consultation proposes a new two-stage test based on the disposable capital and monthly income of the claimant both of which the applicant will have to pass both tests to be eligible for a fee remission. Depending on their financial circumstances, a person may have their entire fee or part of their fee remitted (where they will only have to pay a contribution towards their fee):

It is proposed that the new system that would apply across all fee charging business areas with the exception of the First-tier Tribunal (Immigration and Asylum Chamber).

  1. The first test (the disposable capital test) will determine whether an applicant is eligible for a remission based on an assessment of their householddisposable capital. ‘Household’ is defined as a household unit as a single person or a couple; and,
  2. The second test (the monthly income test) will consider whether an applicant who passed the disposable capital test receives a full fee waiver, pays a contribution towards their fee or pays the full fee.

A full fee waiver will be granted if the applicant can demonstrate that their household income is below a certain threshold (set out below). Above the threshold the applicant would be required to pay a contribution towards the fee, up to the value of the fee, based on a percentage of their income in excess of the threshold, or the full fee where their income exceeds the threshold by a defined amount.

1.    The disposable capital test

The proposal is that:

  • For fees up to £1,000, remissions would be limited to applicants whose household’s disposable capital does not exceed £3,000.
  • For fees between £1,001 and £4,000, remissions would be limited to those applicants whose household’s disposable capital does not exceed £8,000.
  • Where a fee may exceed £4000, they propose to increase the capital limit to £16,000.

Treatment of disposable capital

The key types of disposable capital to be considered are extensive and include:

  • All capital held in all types of savings accounts, ISAs, fixed rate bonds, market linked investment bonds or savings, trust funds, or any other fund available to the applicant;
  • Stocks or shares;
  • Any type of capital financial product;
  • Redundancy capital payments received;
  • Second homes;
  • Any jointly held capital; and
  • Any type of capital held outside the UK.

The following outlines the key types of disposable capital which would not be considered:

  • The value of property and land occupied by the party as their first home;
  • Unfair dismissal capital payments received;
  • Compensation received for a personal injury or medical negligence;
  • Capital held in personal pension schemes, occupational pension schemes or insurance products; and
  • Any payments to be considered as income.

2.    The monthly income test

Under the full remission element, gross monthly income thresholds are proposed for single people and couples, with a further allowance added for each dependent child.

Proposed income thresholds:

Gross Monthly Income with          Single                         Couple

No Children                                       £1,085             £1,245

1 Child                                                £1,330             £1,490

2 children                                          £1,575             £1,735

The Government intends to accept that recipients of Income-related Employment and Support Allowance, Income Support, Income-based Jobseeker’s Allowance and Pension Credit guarantee credit would be automatically deemed to fall below this income threshold and will therefore receive a full remission, if they also pass the household disposable capital test.

The consultation includes a link to an online excel calculator which demonstrates how the test would work – https://consult.justice.gov.uk/digital-communications/fee-remissions-court-tribunals/consult_view

Evidence required

The following is a summary of the evidence which the Government intends to accept to apply for a full or partial remission based on income:

  • Documentary evidence of a qualifying benefit as issued by DWP dated within the last month, or the current financial year for Pension Credit guarantee credit.


  • Three month’s bank statements in addition the evidence detailed below:

i)        Paid employment: applicants must provide their most recent original wage slips from all their jobs;

ii)       Self-employment: applicants must provide their most recent tax return (SelfAssessment), and either their most recent HMRC Self-Assessment Tax Calculation or other proof of current income;

iii)     Other source of income: applicants must provide alternative documentation if the other sources of income have not been listed within their bank statements.

Retrospective fee remissions

To reduce the administrative burden on court/tribunal staff it is proposed to reduce the period in which applicants can apply for a retrospective remission from 6 months to 2 months.


Draft forms have yet to be published. The consultation estimates that the transition costs for HMCTS including issuing forms and guidance and minor staff training is expected to be a mere £3,000.

The Government will publish a response to the consultation in the summer.

This article was first published in the New Law Journal on 31 May 2013, and is reproduced by kind permission. http://www.newlawjournal.co.uk/nlj/biographies/philip-henson

Philip Henson

Partner and Head of Employment Law, DKLM LLP 



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Fees in the Employment Tribunal – Let’s face the music and dance

Fees in the Employment Tribunal – Let’s face the music and dance

The draft statutory instrument to introduce fees in the Employment Tribunals (ET) and the Employment Appeal Tribunal (EAT) (the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013) has recently been laid before Parliament.

Claimants, or appellants, will be required to pay an “issue fee” on submitting a claim or appeal and a “hearing fee” before the full hearing. The anticipated implementation date is – perhaps optimistically – the end of July 2013. The fee levels are the same as those in response to the Government consultation.

The official policy aim of the introduction of fees is to transfer some of the cost of running the ET and EAT from taxpayers to Tribunal users. The policy objective is to require those users to pay fees where they can afford to do so in order to have their workplace dispute resolved through the ET and EAT process.  It is worth taking a moment to reflect on the potential teething problems that may potentially arise under the new regime.

Computer says no – A recent ‘dear stakeholder’ letter from HM Courts & Tribunals Service (HMC&T)  to ET and EAT stakeholders (dated 25 April 2013) advised that they are ‘currently working with corporate partners and HM Courts & Tribunal Service operational staff to ensure that the necessary IT systems and administrative processes are in place to support the new fee structure’.  Without sounding too cynical there may be (at least initially) glitches in the new IT systems.

Back-up system? – It is not immediately clear what practitioners will do if the new IT systems crash or if online fee payments are not accepted (or received) due to technical glitches. Is there a back-up plan?

A recent Q&A document from HMC&T provides that fee payments will be made via the online service or will be otherwise collected through centralised processing centres. It also confirms that local ET or EAT offices will not have facilities to take fees, handle cash/cheques or undertake any additional banking functions. Remission applications will also be centralised within the centralised processing centres.

Extensions of time limits – Will Employment Judges use their discretion to extend the time limit for bringing a claim if there is a problem with the new IT systems? The Q&A document states: “there is no extension to the existing time-limits for making claims because paying a fee or completing a remission form should not cause the parties to fail to meet existing time-limits”. It would seem likely that a strict approach will be taken.

Consequences of failure to pay a fee – The ‘dear stakeholder’
letter provides that in the EAT fees will be required upon lodging the appeal and in advance of the oral hearing. Failure to pay these fees (or prove eligibility for remission) will result in the discontinuation of the appeal. In view of the existing strains on the Tribunal system we will need to consider if there are sufficient resources to deal with an influx of new applications to deal with technical appeals.

Expect an increase in the level of fees charged – Charging fees is going to be a money spinner (or a recoupment on investment depending on your viewpoint). The explanatory memorandum to the Fees Order confirms that ‘fee levels will be initially set at 33% of the full cost’. We can safely expect an increase of at least 67%; and it is highly likely, in my view, that the Treasury will soon spot the opportunity to fill the coffers by rolling out fees in further areas of the ET and EAT system – perhaps resulting in payment of fees for routine applications.

ACAS – Let’s not forget that ACAS is funded by the tax payer. I consider that it is highly probable that the Government could (eventually) seek to charge for using the service of ACAS. Perhaps by introducing a COT3 completion fee to be shared between the parties (or more likely paid by the employer) when a COT3 is completed?

Remissions/ability to pay – When the Government consultation was first published the Institute of Directors (Iod) stressed that the framework should analyse an individual’s ability to pay rather than their employment status, as they foresaw the risk that fees might be waived for the vast majority of claimants who are out of work.  The ‘dear stakeholder’ letter explains that the Ministry of Justice (MoJ) is in the process of reviewing the remissions scheme as part of the changes needed to introduce Universal Credit in autumn 2013.

The Q&A document explains that: “As a general rule, everyone is deemed to be able to pay unless they demonstrate (by way of application through court remissions scheme), that they are unable to do so”. The Ministry of Justice (MOJ) has recently published a new consultation on a wide-ranging reform of the fee remission (waivers) system for the Courts and Tribunals, and it proposes a two-stage test based on the disposable capital and monthly income of the claimant.

Refund proposals – Cash back? – The initial Government consultation proposed that no refunds would be given if the hearing fee is paid and subsequently the case does not require a hearing. Following the Government’s reply to the consultation that proposal looks set to continue. A response to the consultation made the valid point that once a claimant had paid the hearing fee they may well feel that they want to continue to a full hearing, as they have ‘invested’ in their claim. With this in mind perhaps in the same way that the vast majority of employers offer a contribution towards the employee’s legal expenses when entering into a compromise agreement, we may see respondents offering additional ‘sweetener’ payments representing a contribution towards repayment of incurred fees.

Service standards and expectation –Tribunal users will expect higher levels of service from the Tribunal Service, and Tribunal user groups/forums might become more vocal. It is not clear if HC&TS intends to recruit more staff, or roll out more training to meet the likely increase in service expectations.

Mediation – There will be a push towards Alternative Dispute Resolution (ADR), most notably mediation. I predict that commercial mediation providers will attempt an early land grab, followed closely by ACAS – who offer a mediation service, for which they charge c.£1,000 for the first day and £620 for subsequent days.

Practical tips

  • Client care letters – Solicitors will need to update their client care letters and costs letters to clearly inform clients about the level of issue and appeal fees, and the monies that will be required on account.
  • Case Management system – As payments will need to be made using the online service or otherwise collected through centralised processing centres.   Clients and solicitors will need to ensure that they have procedures in place to do this.
  • As hearing fees will need to be paid 4-6 weeks before the hearing practitioners will need to take careful note of the deadlines for fee payments.
  • Entitlement to remission – Practitioners should advise their clients as to the criteria to apply for a remission of fees, the evidence required, and the time limits for making an application.
  • Dispute Resolution and ACAS – Under the new ET rules a Tribunal shall wherever practicable and appropriate encourage and facilitate the parties use of the services of ACAS, ‘judicial or other mediation, or other means of resolving their dispute by agreement’. Practitioners should consider all available methods of dispute resolution, and the likely costs. Fees for judicial mediation are to be £600 and are to be paid by the employer, practitioners would be advised (as always) to reach out to ACAS at an early stage to try to resolve the dispute pre-issue, before Tribunal fees/judicial mediation fees are incurred.
  • Insurance companies – As Tribunal fees are a recent development existing legal expenses insurance policies may be silent as to who is responsible for paying Tribunal fees, in which case clients will need to carefully review the terms. Solicitors who are instructed on behalf of an insurance company, or are on an existing panel, will also need to carefully consider the terms and conditions of their relationship with the insurance company.

This article was first published by Solicitors Journal on 28 May 2013, and is reproduced by kind permission. Please see  www.solicitorsjournal.com.


HMC&T Service – “Dear stakeholder” letter (25 April 2013) http://goo.gl/lp1oV

HMC&T Service – “Q&A” (25 April 2013) http://goo.gl/nEjXr

Philip Henson

Partner, and Head of Employment law, DKLM LLP

W. www.dklm.co.uk

E: p.henson@dklm.co.uk


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Phil Henson’s Academy Award (Oscar) Predictions 2013

Phil Henson’s Academy Award (Oscar) Predictions 2013

You don’t need me to tell you that this has been an exceptional year for film. When I first watched Argo I was adamant that it would win best picture, and perhaps best director – alas it was not nominated for the latter category.

The hardest class to predict this year is best supporting Actor. I thought that Christopher Waltz was fantastic in Django unchained (as did BAFTA and the Golden Globes) and he must be the favourite, but I thought Philip Seymour Hoffman was wonderful in The MasterTommy Lee Jones is another strong contender for his role as Thaddeus Stevens in Lincoln.

There are many more excellent films that will be overlooked at the Oscars this year which I would urge you to check out:

  • Wes Anderson‘s Moonrise Kingdom is an imaginative film which brought some memorable performances (Wes Anderson’s films always do) – alas it it slightly overshadowed by other films this year.
  • Beasts of the Southern Wild is another original film and screenplay which was beautifully directed with a superb performance from Quvenzhane Wallis.

I have to give a big cheer to British Film Les Miserables as it was great to see Greenwich used as a location so effectively.

Here are my thoughts on who may win this evening. I have put a star next to the winners that I am the most sure of.




Daniel Day-Lewis* (Surely a knighthood beckons! Arise Sir Daniel?)


Philip Seymour Hoffman


Emmanuelle Riva* (Happy Birthday by the way!)


Anne Hathaway*

Writing (Adapted Screenplay)

Silver Linings Playbook*

Screenplay by David O. Russel

Writing (Original Screenplay)

Django unchained*

Written by Quentin Tarantino


Wreck-it Ralph


Life of Pi – Claudio Miranda

Costume Design

Anna Karenina – Jacqueline Durran


Beasts of the Southern Wild – Benh Zeitlin

Documentary Feature

Searching for sugar man – Malik Bendjelloul and Simon Chinn*

Documentary Short Subject

Mondays at Racine – Cynthia Wade and Robin Honan

Film Editing

Argo – William Goldenberg

Foreign Language Film

Amour – Austria*

Makeup and hairstyling

Les Misérables – Lisa Westcott and Julie Dartnell

Music (Original Score)

Argo – Alexandre Desplat

Music (Original Song)

Skyfall – Music and Lyric by Adele Adkins and Paul Epworth*

Production Design

Les Misérables

Production Design: Eve Stewart*

Set Decoration: Anna Lynch-Robinson*

Short Film (Animated)

Adam And dog – Minkyu Lee

Short Film (Live Action)

Asad – Bryan Buckley and Mino Jarjoura

Sound Editing

Django unchained – Wylie Stateman

Sound Mixing

Les Misérables

Andy Nelson, Mark Paterson and Simon Hayes

Visual Effects

Life of Pi

Bill Westenhofer, Guillaume Rocheron,

Erik-Jan De Boer and Donald R. Elliott

Philip Henson is a partner and Head of Employment law at leading London law (UK) firm DKLM LLP (www.dklm.co.uk), and an aspiring screenwriter. http://uk.linkedin.com/pub/philip-henson/14/464/694

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Collective Redundancies – Consultation on changes to the rules (BIS)

 Collective Redundancies – Consultation on changes to the rules (BIS)

 Collective Redundancies – the current regime

 Like all other EU Member States the UK is covered by the Collective Redundancies Directive (Directive 98/59 – “The Directive”)). The aim of the Directive is to provide protection for employees in large-scale redundancies, but without preventing employers from taking necessary steps to restructure. It requires that all employers consult with representatives of their employees when large-scale redundancies are planned. The Directive is implemented through sections 188-198 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). TULRCA requires that, where an employer is proposing to dismiss as redundant 20 or more employees at a establishment in a 90-day period, the employer must consult with representatives of their employees (trade unions where they are present) about the redundancies.

 The consultation must begin in good time, be conducted with a view to reaching agreement and must cover, at least, ways of:

  • avoiding the dismissals;
  • reducing the numbers of employees to be dismissed; and
  • mitigating the consequences of the dismissals.

TULRCA requires that no redundancy can take effect until at least:

  • 30 days after the start of consultation where between 20 and 99 redundancies are proposed; or
  • 90 days after the start of consultation where 100 or more redundancies are proposed.

In accordance with the Directive, the employer must also notify the Secretary of State for Business, Innovation and Skills (BIS) of the proposed redundancies to the same timescale – to allow the Government to coordinate the work of its agencies to offer assistance to both the employer and the affected employees.

The Directive requires that notification to the Government takes place at least 30 days before redundancies take effect.

BIS have published a new consultation document entitled “Collective Redundancies – Consultation on changes to the rules (BIS)”

Within the Consultation the government is keen to point out that the obligation to consult has been in place largely unchanged since 1975, and that the working environment has evolved.

Business has become more global and, as a result, markets have become more competitive. This means business change is more frequent. The UK labour market has become more flexible. There are over 29 million people employed in the UK and millions of movements in a year between jobs, and between employment, unemployment and inactivity. There is less emphasis on career longevity with a single employer” .

Call for Evidence 2 – November 2011

The Government published a Call for Evidence2 in November 2011 which sought evidence on whether existing rules now present a barrier to employment flexibility in the labour market and can put future business success at risk.

 The responses showed that employers and trade unions were at odds about the advantages and disadvantages of the 90-day minimum period. However, both were keen to see an improvement in the quality of consultation.

 Conclusions from call for evidence

      • Employers

Employers were agreed that the current regime was affecting their competitiveness at both a domestic and global level. They stated that the current rules (and in particular the longer, 90-day period before redundancies could take effect) delayed their ability to respond to changing market conditions in a timely way. Their inability to restructure efficiently and effectively can make it difficult for employers to take advantage of new opportunities and so hamper growth.

 Employers also highlighted the additional administrative and wage burden imposed by the current regime. This was particularly keenly felt in the retail, construction and higher-education sectors where the inclusion of the termination of fixed-term contracts in the count for collective redundancy consultation is a significant issue.

  • Employees

 Respondents to the Call for Evidence identified a number of issues for employees. Chief amongst them was the impact on morale and productivity caused by the uncertainty of extended consultation periods.

  • Employees’ representatives

 The Call for Evidence also highlighted issues for employees’ representatives. The trade union view was that the current regime was vital for job protection and allowed them additional time to reduce the number of jobs lost. However, there were also calls from some employees’ representatives (chiefly trade unions) to go further. Specifically, they felt that the rules should not exclude those employees working at smaller establishments.

  • Government

 Government agencies have stated that there is often a lack of understanding among both employers and employees about the help available. They said that they would like to be involved in the process at an earlier stage, but that many employers were reluctant to contact them early, concerned about presenting the consultation as a fait accompli if they did so.

 Aims of the Consultation

 A straightforward legislative framework. The more complex the legislative process, the more likely that it distracts from the engagement between employer and employees’ representatives.

A positive relationship between the employer and employees’ representatives. Ongoing engagement and a positive working relationship between the employer and employees’ representatives are key to an effective consultation and to speeding up the process where appropriate.

Better mechanisms to allow appropriate Government engagement (e.g. Jobcentre Plus). Ensuring individuals and employers are aware of Government assistance that is available and ensuring that Government engagement is triggered early can help improve the prospects for individuals finding alternative employment and/or for businesses to ascertain whether there are other factors that might mitigate the need for redundancies.

Goverment Proposals:

  • Reducing the 90-day minimum period and replacing it with either a single 30-day period, or a shortened 45-day period, in order to simplify the legislative framework and remove disincentives to quality consultation;

  • Improved guidance to increase certainty about how to define an ‘establishment’ and treatment of fixed-term appointees;

  • A Code of Practice which will address a number of key issues around the processes that detract from quality consultation, seeking to facilitate a positive relationship between the employer and the employees’ representatives;

It is proposesd that the Code of Practice will cover areas including:

  1. When consultation should start to allow employers to get the most from the process and to allow employees’ representatives an opportunity to put forward alternative proposals;

  2. Who the consultation should cover. This will include consideration of the factors that could help employers and employees’ representatives decide what constitutes an establishment and whether fixed-term appointees should be included. It will also encourage employers not to break-up redundancies into smaller chunks to ensure that as many employees are represented as possible;

  3. Who should be consulted, including identifying appropriate employees’ representatives and consulting at the most appropriate level of management;

  4. What should be discussed, including whether this extends to the business decision behind the redundancies and the information that should be provided to employees’ representatives. This will attempt to explain the impact of the Akavan European Court of Justice (ECJ) case;

  5. How the consultation should be conducted. This will focus strongly on the spirit of the consultation, ensuring that it is conducted with a view to reaching agreement and that parties are given sufficient time to consider and respond to alternative proposals;

  6. When consultation can be considered to be complete; and

  7. Conducting consultations in non-standard circumstances, including business transfers and insolvencies.

  8. How to engage effectively with the Government and the benefits that this could bring

  • Improved guidance on the support on offer from Government to ensure employers and employees understand better how they can manage the wider implications of the redundancy situation and engage Jobcentre Plus at an early stage without undermining the consultation.

Goverment Statistics

During 2011, 589,000 people were made redundant. Collective redundancy situations involving 100 or more employees typically result in about 75,000 redundancies per year.

Here is a link to the consulation and how you can get involved – http://www.bis.gov.uk/assets/biscore/employment-matters/docs/c/12-808-collective-redundancies-consultation.pdf

Need Employment Law Advice?

For employment law advice contact the employment team at DKLM -Philip Henson –  p.henson@dklm.co.uk; or Julian Cox – j.cox@dklm.co.uk. www.dklm.co.uk

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Phil’s Playlist – June 2012

Song                         Artist

Witness (1 Hope) – Roots Manuva   
Alphabet Aerobics –  Blackalicious 

I’m Her Daddy – Bill Withers 

Blues Music   – G. Love & Special Sauce 

They Long To Be Close To You  – Bobby Womack 

Black coffee – Saint Germain   

Shelter  – Birdy 

Somebody That I Used to Know (feat. Kimbra) – Gotye 

Paranoid Android  – Sia 

Born to Die  – Lana Del Rey 

Stay – Lisa Loeb 

We Used to Wait (cover)   – Mark Ronson & The Business Intl. 

So tired of waiting for you – Ray LaMontagne 

A Change Is Gonna Come (Live Lounge)  – Maverick Sabre 

You Don’t Know How Lucky You Are  – Keaton Henson 

More Like Me – Emily and The Woods 

Assault On Interlude  – Medal 

Charmaine – Plan B 

Sabatoge – Beastie Boys

Twitter – EmpLawPhil

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