Employment Law
Discussion Paper
May 2012
1 Foreword
1.1
The recent announcements by the UK
Business Secretary, Vince Cable, on the
Coalition Government’s plans to conduct a
fundamental review of employment law, have
created significant interest here in Northern
Ireland.
1.2
Northern Ireland is the only region of the
United Kingdom where employment law is
devolved. I appreciate that there may be an
expectation that my Department will simply
Dr Stephen Farry MLA
mirror the UK Government‘s review,
initiating public consultations on individual policy areas to the same
timescales as in the rest of the UK. However, I believe this approach
would not be consistent with the Programme for Government, which is
about developing regional solutions that are more sensitive to the
particular needs of individual citizens and local businesses.
1.3
With this in mind, I have had initial meetings with the key stakeholders
to get a better understanding of the critical issues that need to be
addressed here in Northern Ireland. Employer representative bodies
are advocating a lighter touch to employment regulation on the basis
that this will build business confidence and encourage employers to
increase their workforce. Conversely, the trade union movement
believe that a number of the UK proposals are about weakening the
existing framework of employment rights and that this will have an
adverse effect on the economy.
1.4
Where there has been consensus is on the need to have a wider
debate as to how the current framework of employment law can be
improved for the mutual benefit of individual employees and the
business community.
1.5
Any review needs to build on the very positive policy initiatives that my
Department has taken forward in partnership with key stakeholders.
The 2011 Employment Act, which changed fundamentally the way
workplace disputes are resolved, demonstrated the value-added of the
Department working in partnership with stakeholders to achieve a NIspecific policy solution. I am persuaded that a similar approach to a
more fundamental review of employment law is the right approach.
1.6
In the Executive’s Economic Strategy, I have already committed my
Department to a review of employment law which will “seek to stimulate
business confidence whilst maintaining the rights of individual
employees”. I believe that this sets a unique challenge which can only
be met through joint working and a willingness to look for solutions that
promote equitably the needs and interests of individual employees and
businesses. As a first step, I want to initiate meaningful dialogue with
the employment relations stakeholder community, to determine the
scope and sequencing of the policy areas to be covered in any review
of employment law.
1.7
The purpose of this discussion document is to provide key stakeholders
with an understanding of what is being proposed by the UK
Government and where those proposals sit in the context of current
employment relations developments here in Northern Ireland. What we
need to achieve collectively is an understanding of what are the policy
and practice issues that need to be taken forward here in Northern
Ireland as a matter of priority.
1.8
I would emphasise that this is not a consultation on fixed proposals.
Instead, I am outlining some areas for possible reform. But equally, I
am seeking views on whether there are alternative issues where reform
would make a positive impact. Stakeholders and the public have the
opportunity to shape policy now, before we develop firm options for
change.
1.9
We are in challenging times and it is critical that we work together to
develop innovative regional solutions that stimulate business
confidence whilst maintaining the rights of individual employees. I
would encourage all stakeholders, in responding to the range of
proposals set out in this discussion, to focus on the key actions which
will help to create a regulatory framework that enjoys the confidence of
employees and the business community.
DR STEPHEN FARRY MLA
Minister for Employment and Learning
May 2012
2 Introduction
2.1
The Department is committed under the Executive’s Economic Strategy, to
conduct a review of employment law. The review will be carried out in line with
Better Regulation principles to identify opportunities to reduce the regulatory
burden on businesses whilst maintaining the rights of individual employees.
2.2
The scope of the review of employment law in Great Britain is significant and
the Department has structured this discussion paper to facilitate stakeholders’
consideration of the range of policy proposals. The GB review proposals fall
under three broad themes:

early resolution of workplace disputes;

efficient and effective employment tribunals; and

measures to reduce the regulatory burden of existing employment
legislation.
2.3
Under each of the themes, the paper starts with a brief overview of recent
developments here in Northern Ireland. The Minister for Employment and
Learning is committed to taking forward a review that builds on existing good
practice and, therefore, it is important that stakeholders are aware of recent NI
policy and legislative changes. The paper then sets out the policy intention
behind each of the individual GB proposals and how they might relate to the
Northern Ireland context.
2.4
The Department does not want to be directive in terms of how stakeholders
respond to this discussion paper, but would offer the following general
prompts which individual organisations may find helpful in framing responses
to the range of policy proposals.
2.5

Is there merit in considering each of the individual GB proposals for
introduction in Northern Ireland?

If so, what are the key issues to be explored?

Are there alternative proposals that merit consideration?

Is the status quo a preferred option?
It is for individual stakeholders to determine the extent and nature of their
response. The Department will be pleased to receive responses to some or all
of the policy issues or, alternatively, some stakeholders may wish to provide
more general responses. Anyone wishing to discuss further any of the issues
raised in the discussion document, in advance of submitting a response,
should contact Tom Evans (Tel: 028 9025 7520) or Conor Brady (Tel: 028
9025 7556).
2.6
The Department is seeking responses by 20 July 2012. Responses should be
submitted to:
Post: Employment Law Review
Employment Relations Policy and Legislation Branch
Room 203
Adelaide House
39-49 Adelaide Street
BELFAST
BT2 8FD
E-mail: employment.rights@delni.gov.uk
Telephone: 028 9025 7580
Fax: 028 9025 7555
2.7
Please indicate in your response whether the views you are expressing are
your own individual views or those of the organisation you represent.
2.8
If you think that any organisations or individuals are likely to have an interest
in this consultation, please let us know their contact details.
Alternative formats
2.9
This paper and other Departmental publications may be made available in
alternative formats upon request.
3 Early Resolution of Workplace
Disputes
CURRENT POSITION IN NORTHERN IRELAND
3.1
The Department recently conducted a fundamental review of the current
dispute resolution systems which resulted in the passage of the Employment
Act (Northern Ireland) 2011 and the establishment of a dispute resolution
system that differs significantly from that in the rest of the UK. The key
developments resulting from the review are:

retention of the statutory procedural framework governing most
disciplinary issues and dismissal situations (in GB the procedures have
been repealed);

repeal, as in GB, of the statutory grievance procedures;

the introduction of a revised Labour Relations Agency (LRA) Code of
Practice on Discipline and Grievance;

the introduction of an enhanced LRA pre-claim conciliation service;

increased focus on the use of mediation; and

the development of an enhanced arbitration scheme, covering all
discrimination and non discrimination jurisdictions, due to be introduced
in 2012.
UK GOVERNMENT PROPOSALS
3.2
The UK Coalition Government’s employment law review deals with a range of
matters concerned with resolving disputes arising in the workplace. Even
though the Department has only recently completed an extensive review of its
own, and implementation of the recommendations is still ongoing, there is
merit in establishing whether the following GB proposals should be
considered as part of a NI review of employment law.
Early conciliation
3.3
Currently, individuals who believe their employment rights are being infringed
are entitled to submit a claim to an industrial tribunal or, where relevant, the
Fair Employment Tribunal. When the Office of Industrial Tribunals and the
Fair Employment Tribunal (OITFET) receives the claim, a copy of it is sent to
LRA whereupon the Agency offers to the parties its conciliation services in an
effort to resolve the dispute without the need to continue the legal process.
Very much the same process operates in respect of Employment Tribunals in
Great Britain, where the conciliation body is ACAS.
3.4
Under the Coalition Government’s proposals, the process for submitting a
complaint to an Employment Tribunal in Great Britain would be changed.
Individuals alleging a breach of their employment rights would have to submit
their dispute to ACAS rather than the Employment Tribunal in the first
instance. Whilst the parties to the dispute will be under absolutely no
obligation to engage with the ACAS conciliation service, and may decide to
send a claim to tribunal at this stage, the intention behind this proposal is to
encourage a greater number of workplace disputes to be resolved without the
need for legal proceedings.
3.5
Requiring all potential tribunal claims to be directed through ACAS could
encourage disputing parties to focus more than they do at present on the
possibility of reaching an agreed settlement. This would certainly be in
keeping with the Department’s policy of promoting Alternative Dispute
Resolution (ADR) mechanisms to resolve more disputes at an early stage, to
avoid unnecessary and potentially costly legal proceedings.
3.6
However, there is the counter argument that an additional mandatory process
may achieve little more than a symbolic shift of administrative functions from
OITFET to the LRA. Since tribunal claims are already copied by OITFET to
the LRA, there are already opportunities to encourage resolution in very much
the same stage of the dispute.
3.7
The Department did consult on the option of making ADR mandatory (and
indeed on ‘incentivising’ it) during the recent review of workplace dispute
resolution systems and there was only limited support for this proposal.
Nevertheless the Department is interested in hearing the views of
stakeholders on the merits of the GB proposal.
Rapid resolution
3.8
The UK Government is considering the introduction of a scheme to provide
quicker, cheaper determinations of low value, straightforward claims (e.g. in
relation to holiday pay) as an alternative to determining such cases as part of
a traditional tribunal process. BIS is still considering how this might be
achieved and the Department will assess whatever proposals emerge.
3.9
Northern Ireland experience to date suggests that that greater efficiency in
dealing with simpler cases can be achieved through refinements to the current
tribunal case management systems and that there may not be a requirement
for a new scheme. The tribunal judiciary has taken steps to improve case
management processes, and will continue to look for opportunities to improve
the effectiveness of the current arrangements.
3.10
The Department is nevertheless interested in hearing whether there might be
better ways of dealing with simpler disputes than the tribunal system currently
provides.
Mediation
3.11
The Department for Business, Innovation and Skills (BIS) in Great Britain has
announced that it intends to work with the mediation industry and key
stakeholders through a number of initial pilot exercises, to establish whether
and to what extent mediation can offer an effective solution to employment
disputes.
3.12
The Northern Ireland review of dispute resolution has already recommended
much greater use of mediation and other ADR mechanisms such as
conciliation and arbitration, and the LRA as a consequence is diversifying its
portfolio of services – not least with the planned introduction later this year of
new statutory arbitration arrangements designed to provide an alternative to
tribunal proceedings.
3.13
An important recommendation emerging from the Northern Ireland review was
a proposal to consult stakeholders on the possibility, value and practicalities
of establishing a professional ADR network, possibly underpinned by a code
of ethics, continuous professional development, and a professional register for
appropriately qualified practitioners. This discussion paper invites views on
whether such a network would have value and, if so, how it might operate.
4 Efficient and Effective Employment
Tribunals
CURRENT POSITION IN NORTHERN IRELAND
Process and legislative improvements
4.1
In response to feedback from users, much positive work has been done in
recent years to improve the efficiency and effectiveness of employment
related tribunals in Northern Ireland. Operationally, the judiciary and
administrative staff have worked to improve systems. A robust Case
Management Discussion system has been developed that requires parties to
detail or narrow the issues of the case, introduces timetabling for exchange of
documentation, agrees the use of witness statements and the date for listing
the case for full hearing. The President of the Tribunals has also introduced a
rigorous postponement policy which requires parties to justify applications for
the deferral of a hearing. The tribunal secretariat is also subject to challenging
listing targets which are reported upon annually.
4.2
In a further move to promote efficiency, the Department has removed a
legislative requirement that two separate tribunal processes are conducted
where a claim relates to an alleged breach of fair employment legislation but
also includes other industrial tribunal jurisdictional matters.
4.3
Finally, a Memorandum of Understanding has been agreed between the LRA
and OITFET to facilitate closer joint working, specifying how the two
organisations will work together to maximise opportunities to resolve disputes
without the need for a tribunal hearing.
Rules of Procedure
4.4
A significant development since the conclusion of the dispute resolution
review has been the establishment of a new Standing Advisory Committee on
the Tribunal Rules of Procedure (‘Rules Committee’) to consider the
effectiveness of the current Rules and recommended changes where
appropriate.
4.5
The Rules of Procedure governing the conduct of employment-related
tribunals are set out in two separate but similar Statutory Rules, the Industrial
Tribunals (Constitution and Rules of Procedure) Regulations (Northern
Ireland) 2005 and the Fair Employment Tribunal (Rules of Procedure)
Regulations (Northern Ireland) 2005. The Rules specify, among other things,
the processes for dealing with claims and responses, requirements around
conducting hearings, the process for reviewing a decision and the
circumstances in which an award of costs may be made.
4.6
The purpose of the Rules Committee, as its name suggests, is to advise the
Department on possible changes designed to improve processes set out in
statute which govern the operation of tribunals. The expert group consists of
members of the tribunal judiciary, representatives of tribunal users, and
officials from the Department with responsibility for policy and legislation. A
key challenge will be to develop a consolidated set of rules that take account
of the many changes over the last 10 years.
UK GOVERNMENT PROPOSALS
4.7
With the above arrangements in place, Northern Ireland is already well
positioned to consider the recommendations expected to be produced in the
near future by a review committee, led by Mr Justice Underhill, which has
been tasked with taking forward a root and branch review of the Employment
Tribunal Rules operative in Great Britain.
4.8
The Northern Ireland Rules Committee will be paying close attention to the
outcome of the Underhill review, but the Department is also interested in the
views of stakeholders on whether there are any pressing issues that might be
addressed by way of a future amendment to the tribunal rules.
4.9
Although the Underhill review will examine a wide range of issues, the UK
Government has already reached policy decisions on a number of matters,
and again the Department would welcome views on whether comparable
steps are necessary or appropriate in Northern Ireland.
4.10
The Department would welcome views on the GB approach which provides
for the establishment of an expert user group, drawn from the key stakeholder
organisations, to provide advice and direction to the Rules Committee on
aspect of the Rules that are problematic from a user’s perspective.
Witness statements
4.11
The UK Government has announced that witness statements before
Employment Tribunals are now to be ‘taken as read’ to speed up tribunal
proceedings. Practice to date in Great Britain has not been uniform, but in
many cases the reading of witness statements where issues are already
known and understood has been seen as wasteful of the tribunals’ and
parties’ time. Whilst there may be rare circumstances in which the reading
aloud by a party of a witness statement, or part of it, may assist the tribunal in
its consideration of the case, the default position will now be that witness
statements are taken as read.
4.12
Similar practice is already being introduced into Northern Ireland’s tribunals,
following discussion with tribunal users, and the Department considers that it
is appropriate for tribunals to continue to approach this matter within the
overriding objective of dealing with cases justly, as set out in the Regulations
establishing the Rules of Procedure.
Chairs sitting alone in unfair dismissal cases
4.13
In Great Britain, action is also being taken to provide a discretionary power to
allow employment judges to hear unfair dismissal cases alone, without the
need to be accompanied by lay panel members. The UK Government’s
rationale is that many cases do not require a full panel to hear and determine
the issues, and that it is appropriate in such cases to take steps to save
taxpayers’ money by drawing on the judge’s legal expertise alone to decide
the case.
4.14
Employment judges and their Northern Ireland counterparts, the chairmen of
industrial tribunals and the Fair Employment Tribunal, are already granted
comparable discretion to sit alone to hear cases in relation to a range of
generally more straightforward matters (or jurisdictions) that come before
tribunal. In one interpretation, adding unfair dismissal to this list is simply an
extension of an existing arrangement that reduces expenditure by the state
whilst ensuring that there is a discretionary power to hold a full panel hearing
where appropriate. However, in common with a number of consultees in Great
Britain, some Northern Ireland stakeholders may feel that it is inappropriate to
establish a new default position when unfair dismissal cases often turn on fact
rather than legal complexity and therefore benefit from the practical workplace
experience-based input of lay panel members.
4.15
The Department would be interested to hear opinions on whether greater
discretion should be extended to allow chairmen to sit alone in unfair
dismissal cases. Further, stakeholders are asked to comment on the potential
merits of a wider extension of this arrangement; if such an extension is
merited, to which further jurisdictions should it apply?
Witness expenses
4.16
A further decision designed to reduce expenditure on the tribunal system
centres around witness expenses, which are currently reclaimable from the
state. The UK Government now intends to bring forward a rule change to
empower tribunals and employment judges to direct parties to bear costs of
witness attendance, where a witness has attended pursuant to a witness
order, with the losing party ultimately reimbursing the successful party for any
such costs already paid out. It is not proposed to means test this system, as
establishing relevant machinery is predicted to cost more than Government
would save. The Department would welcome thoughts on whether this
proposal is suited to Northern Ireland tribunals.
Charging fees to use tribunals
4.17
One of the UK Government’s more contentious announcements is the
commitment to introduce charging for the use of Employment Tribunals. At the
time of writing, two potential models are envisaged:
(i).
a fee payable on lodgement of a claim and subsequent fee for bringing
the matter to hearing, the level of such fees being dependent on the
complexity of the claim; and
(ii).
a single fee covering both lodgement of a claim and any subsequent
hearing, the level depending on the nature of the claim and the amount
of the award sought.
4.18
Whichever option is selected, further fees will also form part of the new
arrangements. These will be applied, respectively, to a request for written
reasons; a review application; a request to dismiss a claim following
settlement or withdrawal; the setting aside of a default judgement; lodgement
of a counter-claim; and judicial mediation.
4.19
In establishing the fees regime, it is proposed that a remission system will
operate to assist those who, in its absence, would be unable to access the
tribunal.
4.20
A number of arguments may be advanced in favour of the proposal. Aside
from the principle of transferring cost from state to service user – a principle
that is already operative in the courts – a price mechanism could help to
incentivise more reasonable behaviour in dealing with workplace issues,
bringing about earlier resolution. A further argument in favour of the change
is that it has the potential to deter individuals from bringing tribunal claims that
have little or no merit. These claims, business interests in particular argue,
are a significant drain on employer resources.
4.21
The counter argument is that the introduction of fees will place restrictions on
access to the justice system, particularly for the more vulnerable in society,
and could lead to legitimate claims not being pursued for want of funds.
Moreover, there are those who would question whether there is any hard
evidence of a significant volume of vexatious cases within the system. It is
possible, for example, to point to the very infrequent use of a facility within the
existing tribunal rules that has the potential to ‘weed out’ weak cases. The
provision allows a party to request an order requiring the other party to pay a
deposit of up to £500 in order to continue with proceedings. The tribunal
chairman may choose to issue such an order where he or she takes the view
a party’s contentions have little prospect of success. The Department would
welcome feedback on the advantages and disadvantages of introducing a
fees regime.
4.22
The question for this discussion document is whether the Department should
consult on the same basis or start with the more fundamental question: should
fees be introduced at all?
Pre-hearing deposit
4.23
Following on from the above discussion, it is worth referring to the BIS
decision to double the maximum level of the pre-hearing deposit to £1,000.
This is an area that has already undergone some consideration in Northern
Ireland during the recent dispute resolution review. Some of those who
responded to the review as well as, more recently, the tribunal Rules
Committee, felt that an increase could be justified on the basis that it would
act as a more effective deterrent against claims having little merit.
4.24
Although the deposit mechanism has been seldom used, and it is therefore
difficult to adduce evidence as to its effect, the Department stated in its policy
response to the dispute resolution review that it would explore options for
revising the upper limit, factoring into that consideration individuals’ ability to
pay. Most recently the non-use of deposit hearings was raised by the tribunal
judiciary at a tribunal users meeting. This has acted as a catalyst for a number
of applications for deposit hearings which have had positive outcomes in
terms of case management. However, all of the recent applications for a predeposit hearing have come from respondents and the Department would want
to stress that this facility is equally available to both claimants and
respondents. The Department would welcome views on the use of deposit
hearings and the GB proposals to increase the maximum level.
Costs
4.25
Also considered during the dispute resolution review was the possibility of
increasing, from its current level of £10,000, the ceiling on the level of costs a
tribunal or chairman can order to be awarded. A costs award may be made
against a party where that party has brought or conducted the proceedings in
a manner deemed inappropriate, 1 and the tribunal or chairman is empowered
to take into account a party’s ability to pay.
4.26
In Great Britain, a decision has been taken to double the relevant maximum to
£20,000; however, in Northern Ireland, the Department concluded in response
to feedback from the review that it would not be appropriate to effect change
at that time, other than to address an anomaly which can occur where a
tribunal refers costs to be assessed in a county court. 2 Consultees are invited
to consider whether there is justification, in light of the changes in Great
Britain, for reviewing the position with regard to costs.
Financial penalties
4.27
1
The UK Government envisages giving Employment Tribunals discretion to
levy a financial penalty, payable to the Treasury, on employers found to have
breached employment rights. The detail underpinning this policy change
remains to be worked out; however, consultees may wish to express a view
on its potential applicability to Northern Ireland.
A costs order may be made to facilitate recovery of costs occasioned by a postponement or adjournment
caused by a party. Such an order may also be made against a party in the following circumstances: “where the
paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings,
acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the
proceedings by the paying party has been misconceived.” Finally, a costs order can be made against a party
who has not complied with an order or practice direction.
2
Under current arrangements, a legislative lacuna presents an obstacle to a county court assessing costs in
accordance with the corresponding process in Great Britain. A legislative amendment will be required to
address this situation.
5 Better Regulation Measures
CURRENT POSITION IN NORTHERN IRELAND
5.1
The Department is already engaged in an initial examination of employment
legislation, seeking to identify opportunities to lessen regulatory and
administrative costs. In related work, the Department has also commissioned
research to identify the main challenges faced by Northern Ireland Small and
Medium Enterprise (SME) sector in discharging employment rights and
relations responsibilities. The Department has moved to a risk-based
approach to enforcement/inspection in relation to the regulations that govern
the conduct of employment agencies and employment businesses.
5.2
The UK Government has already announced a series of proposals which
have a better regulation focus. Whilst some of these proposals may not be
relevant, the Department considers that it is appropriate to seek the views of
stakeholders on their applicability to the Northern Ireland context, in the
course of this review.
UK GOVERNMENT PROPOSALS
5.3
Before examining each of the individual proposals within the particular
Northern Ireland context, it is worthwhile setting out two particular issues
which the Department is already examining in collaboration with BIS on a UKwide basis:
- Compromise Agreements; and
- TUPE.
Renaming of Compromise Agreements as Settlement Agreements
5.4
A compromise agreement is a legally binding agreement (if properly
concluded) between an employer and an employee to settle an existing or
potential claim to an Industrial or Fair Employment Tribunal. In effect, the
employee agrees to ‘settle out of court’ by accepting the financial or other
compensation that the employer is offering in return for signing away his/her
right to pursue a claim. The agreement must meet certain requirements to be
viewed as legally binding including being in writing, signed by both parties,
and being concluded following receipt by the employee of independent legal
advice.
5.5
Following consultation, BIS is proposing to rename compromise agreements
as ‘settlement agreements’, a process which will require primary legislation.
The rationale behind this proposal is that the term ‘settlement agreement’
more accurately describes the agreement’s content and will help to remove
any negative perceptions that parties who utilise this option are indirectly
admitting liability.
5.6
The Department has already written to key employment relations stakeholders
to seek their views on this issue. The proposal is not viewed as being
controversial, as the processes that underpin such agreements are not being
amended. Once stakeholders have contributed their views on the proposed
change, the Department will determine whether Northern Ireland should be
included in any legislative changes that need to be made on a UK-wide basis.
5.7
Although the Department is not proposing to review the processes that
underpin compromise agreements at this time, it is nonetheless open to
receiving evidence as to the effectiveness of the current arrangements and
any significant issues experienced by those who operate them.
Transfer of Undertakings (Protection of Employment) (NI) Regulations 2006,
and the Service Provision Change (Protection of Employment) (NI) Regulations
2006
5.8
BIS launched a call for evidence on the effectiveness of the UK-wide TUPE
Regulations in November 2011. The Department issued a similar call for
evidence to NI stakeholders in December 2011, seeking their views on TUPE
and the related Service Provision Change Regulations, which apply to
Northern Ireland only. The call for evidence closed on 31 January 2012. Six
responses were received from Northern Ireland stakeholders and these were
forwarded to the Assembly Employment and Learning Committee prior to
transmission to BIS.
5.9
BIS officials have confirmed that a summary of the evidence will be published
in due course, and the Department will provide input as appropriate. It is likely
that a full consultation will be held later in 2012.
5.10
Early indications of possible areas for change include transparency of
information provided to transferees, extending the length of the two-week
information-sharing period between companies, and the administration around
post-transfer harmonisation. These matters will, however, be discussed in full
in due course.
Change in qualifying period for exercising right to claim unfair dismissal
5.11
Under current legislation in both GB and NI, employees must work for a
period (qualifying period) of at least one year before they become entitled to
exercise the right to lodge a tribunal claim for unfair dismissal. In November
2011, the UK Government announced that the qualifying period would rise to
two years in GB and this legislative change was introduced in GB from 6 April
2012.
5.12
The UK Government’s rationale for this policy in GB is to promote the
necessary business confidence that encourages employers to increase their
workforce without undermining workers’ sense of job security. BIS, in its
impact assessment on Resolving Workplace Disputes, stated that the current
accrual period for unfair dismissal rights brings the additional risk to an
employer of an unfair dismissal claim, which is great enough in some
instances to deter firms from employing additional people and is therefore a
potential barrier to growth and employment. The current qualifying period, it is
argued, is insufficient to allow an employer to fully assess an employee’s
performance and to resolve any problems. BIS has indicated that this change
is likely to result in a modest reduction (1,600-2,100) in the number of tribunal
claims.
5.13
One of the difficulties associated with this proposal is assessing with any
degree of certainty the likely impact of this policy proposal. The BIS impact
assessment reflects this in noting that “it is not possible to directly quantify the
likely impact on business confidence and in turn on hiring behaviour”, and that
“detecting any effect is challenging”. Given the wide range of external
variables, the assessment has been unable to establish a direct link between
the level of unfair dismissal claims and changes in the qualifying period.
5.14
The Department would nevertheless be interested in the views of
stakeholders as to whether the proposal merits further examination.
Collective Redundancies
5.15
The Employment Rights (Northern Ireland) Order 1996 (the 1996 Order)
places a duty on an employer proposing to make collective redundancies to
consult in advance with representatives of the employees. No notices of
dismissal can be issued until the consultation has been completed. The 1996
Order states that employers proposing to dismiss between 20 and 99
employees should begin consultation at least 30 days before the redundancy
notices take effect. Where more than 100 employees are concerned,
consultation must begin at least 90 days before the redundancy notices take
effect.
5.16
In November 2011, BIS issued a call for evidence on the operation of the
requirements for collective redundancy consultation to explore how the rules
for consultation could be improved, and on whether guidance and best
practice examples could help consultation be conducted more effectively.
The main aim was to consider whether the 90-day consultation period for
more than 100 redundancies can be reduced to 60, 45 or 30 days.
5.17
The purpose of the call for evidence was to establish what impact the current
rules on collective redundancy consultation have on business confidence and
flexibility to respond effectively and appropriately to market opportunities. It
was also hoped to understand the challenges for business in pursuing
collective redundancy consultation, including the barriers to starting
consultation and achieving agreement. The UK government considers that
there is a need to bring clarity to the existing arrangements for consultation
with regard to collective redundancies.
5.18
As with the qualifying period for unfair dismissal, there is a lack of robust
evidence, other than anecdotally, regarding how the proposed policy
arrangements would work in practice. Nevertheless, it would be remiss of the
Department, in light of the proposals in GB, to ignore the proposal entirely and
not seek the views of local stakeholders.
5.19
To date, the Department has not received any representations on this policy
proposal and we are therefore unsure as to whether there is any appetite
locally for its introduction, or even its consideration. We would therefore be
grateful to hear the views of local stakeholders as to whether such a policy
change would make any measurable contribution to reducing the impact of
employment legislation on businesses. We would also welcome any views on
how/whether the current collective redundancies provisions could be
improved or clarified.
Limits on certain employment rights related payments
5.20
5.21
Article 33 of the Employment Relations (Northern Ireland) Order 1999
provides that the limits on various statutory awards and payments under
employment rights legislation are linked to the annual percentage change in
the Retail Prices Index (RPI) between one September and the next. The
limits include:

“a week’s pay” for the purposes of calculating statutory redundancy
payments;

the minimum amount of compensation awarded by industrial tribunals
where an individual has been unlawfully expelled from a union in
contravention of Article 38 of the Trade Union and Labour Relations
(Northern Ireland) Order 1995;

the basic award of compensation made by an industrial tribunal for unfair
dismissal;

the limit on guaranteed payments when workers are not provided with
work; and

the basic award for unfair dismissal in health and safety cases.
The UK Government has committed to amending the formula governing the
annual change to the value affected payments so that rounding is more
precise. The Department views this as a reasonable proposal and, subject to
being persuaded by any strong arguments to the contrary, intends to follow
suit. We would nevertheless be grateful for any views on whether this issue
requires further and deeper consideration.
Proposal to introduce compensated no fault dismissal for micro firms
5.22
In November 2011, the UK Government stated that it would seek views on a
proposal that evolved from the ‘Beecroft Report’ to introduce compensated
no-fault dismissal for micro firms – i.e. firms with ten or fewer employees. A
system of compensated no fault dismissal would allow employers to dismiss
staff with basic redundancy pay and notice; employees in these
circumstances would have not have recourse to an unfair dismissal claim. At
the time of the announcement, it was stressed that the Government would be
seeking evidence on both sides and that a call for evidence would issue in
due course.
5.23
The rationale behind such a policy would be to boost employment by
alleviating the risk for smaller employers of hiring new staff who may prove to
be unsuitable, or at least change the perceptions of smaller employers in
respect of barriers to growth.
5.24
There has been a recent call for evidence in GB on this issue; however the
Department is unaware of any concrete evidence either for or against the
proposal. The Department would welcome views on whether this is a policy
that merits further consideration.
Introduction of a system of protected conversations
5.25
BIS also announced in November 2011 that it would consider introducing a
system of ‘protected conversations’, which would allow employers to raise
issues such as poor performance or retirement plans in an open way, free
from the worry that these discussions will be used as evidence in a
subsequent tribunal claim.
5.26
In particular, it is understood that employers have expressed concern that the
offer of a settlement agreement to terminate an employment relationship may
lead to a tribunal claim for unfair dismissal or constructive dismissal.
5.27
It is understood that BIS will consult on proposals within a short period. Until
the detailed proposals are known, the precise rationale for the policy is not
clear. However the CBI in Northern Ireland, in its Unlocking Employment
survey of late 2011, states that ‘protected conversations’ could be used to
discuss an employee’s retirement plans in the absence of a default retirement
age, without the threat of the conversation being used in evidence at a
Tribunal.
5.28
Similarly, it may be appropriate for some form of legal process to allow
settlement agreements to be offered on a ‘without prejudice’ basis.
5.29
At this stage, there appears to be a limited evidence base in this area, but the
Department would appreciate views on whether the proposals merit further
consideration.
Review of employment regulations
5.30
Stakeholders may already be aware that BIS is responsible for the Red Tape
Challenge, which invites the public to comment on existing regulations and
propose whether they be amended or scrapped. As noted in the introduction
the Department is taking forward a pilot to establish a methodology for a more
fundamental review of employment regulations here in Northern Ireland.
5.31
It is the Department’s intention to identify three sets of subordinate legislation
to be considered as part of this pilot. A line-by-line scrutiny of the three sets of
regulations will then be conducted to determine the need for, and adequacy
of, those provisions, and to establish the methodology for a review of all
employment regulations. The overall aim of such a review would be to reduce
the aggregated burden of regulations, by reducing the stock of regulations
that are currently in place. This may be achieved either through the
consolidation of different sets of regulations, or potentially by removing
regulations entirely from the statute book if it is found that they are no longer
required, or the policy intention can be substantively achieved through the
provision of better information and guidance, for example.
5.32
The Department would appreciate views on specific regulations that would be
appropriate for inclusion in this review and how stakeholders can input to the
review process.
Reform of the Recruitment Sector
5.33
The UK Government intends to consult in the Summer of 2012 on proposals
to streamline the current regulatory arrangements governing the conduct of
employment agencies and employment businesses. These proposals follow
on from the recommendations emerging from the Red Tape Challenge and
the Workplace Rights Compliance and Enforcement Review.
5.34
The Conduct Regulations, which govern the private recruitment sector, are
considered by some to be a barrier to entry for new recruitment businesses.
For others, however, compliance with the demands of the Conduct
Regulations is a way of demonstrating good customer service and the
provision of employment protections.
5.35
The Department intends to monitor the development of any proposals in GB
to streamline this legislation, and gauge whether similar changes would be
appropriate for Northern Ireland. In the interim, however, the Department
would appreciate any views as to whether a rationalisation of the Conduct
Regulations would be welcomed, or are the Regulations considered to be “fit
for purpose” in their current form. If the Department receives sufficient
indication that this is an area for further work, then we would anticipate
carrying out more detailed exploratory discussions with stakeholders who
would have an interest in this specific sector.
Further information:
Employment Relations Policy and
Legislation Branch
Department for Employment and Learning
Room 203
Adelaide House
39-49 Adelaide Street
Belfast
BT2 8FD
Tel: 028 9025 7580
Fax: 028 9025 7555
Email: employment.rights@delni.gov.uk
web: www.delni.gov.uk