Consultation on reforming the law on employment disputes

The Government has announced that it will consult on a range of measures to reform the law on employment disputes, including:

  • enabling employers to have "protected conversations" with employees that would be inadmissible in employment tribunal proceedings;
  • simplifying compromise agreements;
  • introducing compensated no-fault dismissals;
  • simplifying the dismissal process; and
  • introducing a rapid resolution scheme. 

The aim of protected conversations is to allow employers to have "frank" discussions with employees, for example about poor performance or retirement plans, "without fear that such a discussion will be used against them if discussions break down". A protected conversation could be initiated by either the employer or the employee. Unlike "without prejudice" conversations, a protected conversation could be initiated before any formal dispute has arisen. 

The Government also intends to consult on simplifying compromise agreements. It proposes creating a standard wording for compromise agreements and allowing them to cover all existing and future claims, without the need to list many separate causes of action. It also proposes to change the name of compromise agreements to "settlement agreements". 

There will be calls for evidence in 2012 on introducing compensated no-fault dismissals for micro firms (those with 10 or fewer employees) and on how to move to "a simpler, quicker and clearer dismissal process". The Government has stated that this could involve amendments to the "Acas code of practice on disciplinary and grievance procedures" or supplementary guidance for small businesses. 

The Government will consider whether or not to introduce a "rapid resolution" system, as an alternative to the employment tribunal process, for low-value, straightforward claims. The aim is to provide quicker and cheaper determinations of some disputes (for example holiday pay claims), reducing the total number of claims that reach an employment tribunal. The Government proposes that a rapid resolution scheme could involve a decision being made on the basis of written evidence alone, without the need for a hearing. Claims could be determined by an independent legal expert, rather than a judge. 

The proposals form part of the Government's plans for what it describes as "the most radical reform to the employment law system for decades". 

  • Resolving workplace disputes: Government response to the consultation (PDF format, 364K) Future consultations on protected conversations, simplifying compromise agreements and a rapid resolution scheme were confirmed in the Government's response to the "Resolving workplace disputes" consultation (on the BIS website). 
  • Reforming employment relations The Government's intention to hold calls for evidence on no-fault dismissals and the simplification of the dismissal process were announced on 23 November 2011 by the Secretary of State for Business, Innovation and Skills in a speech on reforming employment relations. 

Also 

We set out some of the potential pros and cons of having protected conversations with staff:

  • Guest blog: Nick Clegg's "protected conversations" proposal - why it could help Rob McCreath, partner at Archon Solicitors, explains why the introduction of a law to allow employers to have "protected conversations" with underperforming workers could help to reduce tribunal claims, in a guest blog for XpertHR's Tribunal Watch. 
  • Nick Clegg's "protected conversations" proposal: 15 reasons why this won't work The idea of allowing for "protected conversations" with staff appears to be that employers could have performance-management discussions with employees that would not be admissible in employment tribunals later. While we don't know the details of the proposals yet, there are some immediate potential problems that spring to mind. 
  • Protected conversations: An unwelcome layer of complexity? XpertHR's consultant editor Darren Newman asks if the Government’s proposed “protected conversations” could end up rivalling the now abandoned statutory dispute resolution procedures in terms of setting out to reduce litigation but in reality creating a legal nightmare. 

Consultant editor Darren Newman shares his thoughts on some of the Government's recently unveiled proposals for reform, including rapid resolution for certain types of tribunal claims, on the XpertHR Weekly podcast.