The new employment bill

The Government announced its new Employment Bill on 8 November 2001. The new
Bill is, if anything, even more radical than the Employment Relations Act 1999
in its scope, and could change the landscape of employment law entirely.
Employers will be relieved that most of the main proposals are probably to
their benefit.

The proposals

Significant publicity has been given to some of the proposals, such as those
increasing maternity and paternity rights, increasing the powers of employment tribunals
to make costs orders, and the (now-shelved) proposal to introduce a £100 fee
for initiating employment proceedings in the tribunal.

What has not received an enormous amount of publicity so far is the much
more radical proposal to introduce statutory disciplinary and grievance
procedures which would become part of every contract of employment. These are
aimed at simplifying and streamlining employment law, in order to reduce the
complexity of employment cases in tribunals, largely by removing many of the
procedural arguments of applicants in unfair dismissal cases.

In short, employers intent on dismissing any employee at any time will have
to set out, in writing, a statement of the relevant issues to the employee,
have a meeting on the subject, and allow the employee, if he or she wishes, to
appeal. Once an employer has complied with those formalities, it will be hard
for an applicant to show that his or her dismissal was procedurally unfair.

At the same time, employees will be obliged to mount an appeal against their
employer’s decision before they can bring unfair dismissal proceedings in the
tribunal. Similarly, grievances must be lodged before constructive dismissal
claims can proceed.

The proposals are not entirely clear as to how they might work in practice,
but it seems that either party not complying with those obligations will be in
breach of contract and may be prevented from bringing or defending proceedings
in the tribunal. This could mean all post-termination restrictions (eg non-competes)
will be unenforceable. Any dismissal which ignores these procedures is likely
to be automatically unfair, with a minimum compensatory award of four weeks’
pay for the employee. The employment tribunal will also be obliged to increase
(or decrease where appropriate) any compensation awarded by between 10 per cent
and 50 per cent.

The practical effect

The proposals appear to favour the employer by giving employees less scope
to claim any dismissal was procedurally unfair. There will also be greater hurdles
for applicants in bringing tribunal proceedings by virtue of the obligation to
appeal against a disciplinary decision, or raise a grievance, before
instituting such proceedings.

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