The Enterprise and Regulatory Reform Bill has received its First Reading in the House of Commons. The Bill includes a number of measures making changes to the employment tribunal system and dispute resolution processes, following the Government’s employment law review.

In the Queen’s Speech, the Government confirmed its commitment to reforming the employment tribunal system and said that it would introduce an Enterprise and Regulatory Reform Bill, which has now received its first reading in Parliament. The changes are extensive and a key-clause summary is set out below, but of course the format of the Bill may change as it progresses through the Parliamentary process.

Conciliation before institution of ‘relevant proceedings’: Provides that, other than in excepted circumstances prescribed by the Secretary of State, a prospective claimant must first have submitted the details of their claim to Acas before they can lodge their claim at an employment tribunal. Detail of the information that must be sent to Acas will be set out in regulations. An Acas conciliation officer will be required to try and achieve a settlement to the dispute, within a ‘prescribed period’ (to be determined by regulations), but if during that time the conciliation officer concludes that a settlement is not possible, or the period expires with no settlement having been reached, the officer must issue a certificate to the prospective claimant and a claimant will not be able to lodge a claim with an employment tribunal without such a certificate.

Extension of limitation periods to allow for conciliation: Sets out how the relevant time limits for bringing a claim will be extended to provide sufficient time for early conciliation to take place and to ensure that the claimant is not disadvantaged, i.e. ignoring the time between submission to Acas and the issuing of a certificate.

Extended power to define “relevant proceedings” for conciliation purposes: Gives the Secretary of State power to add or remove proceedings from the list in the Employment Tribunals Act 1996.

Decisions by legal officers: Will allow legal officers to determine proceedings prescribed by the Secretary of State where all the parties to the proceedings consent in writing.

Composition of the Employment Appeal Tribunal: Makes provision for proceedings in the Employment Appeal Tribunal to be heard by a judge sitting alone, unless a judge directs otherwise.

Power by order to increase or decrease limit of compensatory award: Allows the Secretary of State to order a variation of the statutory limit on the compensatory award in unfair dismissal claims in one of three ways: (i) a specified amount of between one and three times’ median annual earnings, based on official figures (currently £26,2000; (ii) a specified number, not less than 52, multiplied by a week’s pay of the individual; or (iii) the lower of the two aforementioned amounts.

Power of employment tribunal to impose financial penalty on employers: Gives tribunals a power to impose financial penalties on employers where they are found to have breached a claimant’s employment rights and the tribunal considers that, in the circumstances, the employer’s behaviour in committing the breach had one or more aggravating features. Where compensation is awarded, the penalty must be set at 50% of that amount, subject to a minimum of £100 and a maximum of £5,000. If the employer pays the penalty within 21 days, it is reduced by 50%.

Disclosures not protected unless believed to be made in the public interest: Provides that, in order for a ‘whistleblowing’ claim under the ERA to succeed, a claimant must show that he or she believed that their disclosure was made in the ‘public interest’. This means that disclosures which can be characterised as being of a personal interest, are excluded, e.g. breach of contract claims, which previous case law had held could qualify.

Renaming of “compromise agreements”, “compromise contracts” and “compromises” provides for the names of the aforementioned to be replaced with “settlement agreement” to better reflect their use and content.