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Employment Law Changes in the Enterprise and Regulatory Reform Act 2013

Friday, 21 June 2013

As part of the Government’s Employment Law Review, reforms to Employment law are being brought in by the Enterprise and Regulatory Reform Act during 2013 and 2014.

The primary aim is to boost enterprise through improvements to the labour market such as encouraging early resolution of disputes, making the tribunal system more efficient and giving employers confidence to hire new employees.

Acas Early Conciliation

The Act provides extension of tribunal time limits for parties to attempt conciliation. From April 2014, the new system will require claimants to contact Acas before any proceedings are filed.

A conciliation officer must attempt to negotiate a settlement between those in dispute before the parties can decline early conciliation and proceed to filing a claim.

Tribunal Procedures, Penalties, Deposit Orders and Costs

Parties to a dispute will be able to consent to a legal officer determining certain types of employment proceedings without a hearing; the types of proceedings to which this is applicable are yet to be defined. Meanwhile, from 25 June 2013 EAT cases can be heard by a single judge, unless ordered otherwise by a Judge or the Lord Chancellor.

Starting in spring 2014, employers found guilty of breaching employment rights will be subjected to a financial penalty if one or more ‘aggravating features’ are identified. The minimum penalty will be 50% of any compensation awarded, subject to a minimum sum of £100 or maximum of £5,000 with early payment awarded a reduction.

Tribunals will be allowed to make deposit orders in respect of weak parts of parties’ cases rather than simply over the whole claim. They will also able to award litigants in person their costs and witness expenses. These changes are due from 25 June 2013.

Unfair Dismissal

A power has been granted to vary the unfair dismissal compensation, currently £74,200. Compensation will be limited to 52 weeks’ pay or £74,200, whichever is the least.

If there has been a dismissal for political belief, the Act allows claims from those who did not meet the usual qualifying service, currently one-year for those engaged before 6 April 2012, or two years.

Confidential negotiations before termination of employment will be protected conversations. Evidence that offers or negotiations were engaged in confidentially will make them inadmissible in unfair dismissal proceedings unless the employer has behaved improperly.

These changes are due from 25 June 2013.


Those reporting wrongdoing must be disclosing information that is in the public interest in order to be afforded the whistle-blowing protection, from 25 June 2013. Disclosure is no longer required to be made in good faith, the motive will only be important when compensation is assessed.

There is also a new liability to be imposed on employers that a policy must be in place and shared with the work force to protect whistle-blowers from bullying and harassment by colleagues.

General Equality Issues for Employers

The Act revokes employer’s responsibility to take precautionary steps against the prevention of harassment of their staff by parties outside their organisation.

Employers who lose an equal pay case or a sex discrimination case related to equal pay could be ordered by the Government to carry out a pay audit. They will be exempted from this if they have carried one out in the last three years.

The definition of race in the Equality Act 2010 has been extended to include “caste”, but it has yet to be defined.

For more information about the forthcoming changes to Employment Law, please contact Aneil Balgobin via e-mail or by telephone on 0207 611 4848.

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