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3 May 2013

Enterprise and Regulatory Reform Act in force

Our employment team outlines some of the key employment provisions in this new piece of legislation.

The Enterprise and Regulatory Reform Act 2013 (ERR Act) finally received Royal Assent on 25 April 2013, and includes a wide range of employment-related provisions that will take effect at various points in 2013 and beyond.  Confirmed implementation dates for some of the changes are still awaited.

2013

Certain employment provisions of the ERR Act will take effect from 25 June 2013 including:

  • Removal of the two year qualifying period for a claim for unfair dismissal where the main reason for dismissal is the employee’s political opinions or affiliation.
  • New ‘public interest’ requirement introduced to the definition of a ‘qualifying disclosure’ for whistleblowing purposes; employer to be vicariously liable for victimisation of whistleblowing employee by colleagues.

Other employment provisions of the ERR Act are expected to take effect later in 2013 (dates to be confirmed) including:

  • Repeal of the third-party harassment provisions and the obligation on an employer to respond to discrimination questionnaires under the Equality Act 2010.  New non-statutory ACAS guidance is due to be published, setting out the circumstances in which an employer should respond to requests for information.
  • Capping the compensatory award in claims for unfair dismissal to 12 months’ pay (subject to the existing cap of £74,200) and introducing a new power for the Secretary of State to amend the overall maximum amount of the compensatory award.
  • Compromise agreements to be renamed ‘settlement agreements’, with a new ACAS Code of Practice on settlement together with a model agreement and standard letters.
  • Pre-termination settlement negotiations to be excluded from being used in evidence at tribunal hearings, in claims for unfair dismissal only.

A new draft statutory Code of Practice on how employers should use settlement agreements, together with template letters, has been issued for consultation by ACAS.  Further guidance with a model ‘settlement agreement’ is also expected.

2014

Further provisions of the ERR Act are expected to take effect in spring 2014, including:

  • Mandatory pre-claim conciliation by ACAS, before a claim can be accepted by the employment tribunals.
  • Financial penalties imposed on employers who are held by a tribunal to have breached individual employment rights.
  • Right to request flexible working extended to all employees with at least 26 weeks’ service (not only those with parental or caring responsibilities). A new ACAS Code of Practice on dealing with requests for flexible working will replace the current statutory procedure (a draft Code is currently under consultation).