Enterprise and Regulatory Reform Bill receives Royal Assent

The Enterprise and Regulatory Reform Bill received Royal Assent on 25 April 2013, making it the Enterprise and Regulatory Reform Act 2013. Alongside this, the Government has announced implementation dates for some of the employment law changes introduced by the Act. 

The Enterprise and Regulatory Reform Act 2013 makes important changes to employment law and tribunal procedure. The Act comes into force in stages:

Provisions coming into force on 25 June 2013:

Whistleblowing rights: The Act amends the Employment Rights Act 1996, so that a disclosure will not be protected unless the employee reasonably believes that it is made in the public interest. Disclosures no longer need to be made "in good faith", although where a disclosure is not made in good faith, the employment tribunal can reduce compensation by up to 25%. Further, the Act introduces vicarious liability for the employer where a worker is subjected to a detriment by a co-worker for making a protected disclosure. The employer has a defence where it took all reasonable steps to prevent the detriment. 

Dismissal for political opinions: The two-year qualifying period that an employee must satisfy to be eligible to bring an unfair dismissal claim will no longer apply where the reason for the dismissal is the employee's political opinions or affiliation. 

Agricultural Wages Board: The Agricultural Wages Board, an independent body that determines the minimum wage for workers employed in agriculture in England and Wales, is abolished. 

Procedures and costs of deciding tribunal cases: The Government has confirmed that the provisions in the Act simplifying the procedures and costs of deciding tribunal cases will come into force on 25 June 2013. While it is unclear which amendments are covered by this, it may include:

  • the introduction of "legal officers", who may hear certain types of employment tribunal claims if all parties to a dispute agree;
  • the provision whereby proceedings before the Employment Appeal Tribunal will be heard by a judge sitting alone, unless a judge directs otherwise; and
  • the provision that gives the Secretary of State the power to amend the limit imposed on the unfair dismissal compensatory award, in relation to which the Government announced in January 2013 that it will introduce an individual cap of 12 months' pay, which will apply where this amount is less than the overall cap (previously the Government confirmed that this will be introduced in summer 2013). 

Provisions with other implementation dates: The Government has confirmed that many of the other sections of the Enterprise and Regulatory Reform Act 2013 will come into force in October 2013 or April 2014. This may include the following provisions in the Act:

Shareholders given binding votes on pay policy: The Enterprise and Regulatory Reform Act 2013 gives shareholders binding votes on directors' pay. 

Third-party harassment: The Act repeals s.40(2) to (4) of the Equality Act 2010, which makes an employer liable where an individual is harassed by a third party. 

Tribunal procedure in discrimination cases: The Act repeals the questionnaire procedure under the Equality Act 2010, whereby an individual can apply to obtain information about discrimination from the employer and use this as evidence in tribunal proceedings. The Enterprise and Regulatory Reform Act 2013 introduces a power to make regulations requiring employment tribunals to order an equal pay audit where the employer has breached the equal pay provisions under the Equality Act 2010. 

Caste discrimination: The Act introduces a provision to add "caste" to the definition of "race" under the Equality Act 2010. 

Strict liability for a breach of health and safety duties: Section 70 of the Act amends the strict liability provisions under s.47 of the Health and Safety at Work etc Act 1974. 

Financial penalties for employers that breach employment rights: The Enterprise and Regulatory Reform Act gives tribunals the power to impose a financial penalty against employers where they have been found to have breached employment rights. The Government has previously confirmed that this provision will come into force in spring 2014. 

Early conciliation: The Act introduces a requirement for potential claimants to give details of their proposed employment tribunal claim to Acas before commencing proceedings. Acas will offer the parties the opportunity to engage in conciliation with a conciliation officer for a specified period. The Government has previously confirmed that this will come into force in April 2014. 

Confidentiality of negotiations before termination of employment: The Act introduces the concept of confidentiality for pre-termination negotiations. Tribunals hearing an unfair dismissal claim will be unable to take into account discussions between an employer and an employee or an offer made prior to the termination of employment with the aim of ending the contract on agreed terms. 

Compromise agreements renamed settlement agreements: To encourage parties to settle employment disputes, the Act renames compromise agreements "settlement agreements". Alongside this, a statutory code of practice will be introduced, setting out the principles for using settlement agreements, and model letters, a model settlement agreement and supporting guidance. 

The Government confirms that a detailed implementation timetable will be published by the Department for Business, Innovation and Skills shortly. 


House of Lords accepts employee-shareholder scheme after government concessions The House of Lords has accepted the proposal to introduce employee-shareholder contracts after the Government made a number of concessions in response to the Lords blocking the relevant provisions in the Growth and Infrastructure Bill. 

Government agrees to make "caste" an aspect of "race" under Equality Act 2010 The Government has tabled an amendment to the Enterprise and Regulatory Reform Bill to add "caste" to the definition of "race" in the Equality Act 2010 after the House of Lords voted on 22 April 2013 for a second time in favour of the amendment. 

XpertHR legal timetable View summaries of forthcoming and recently implemented legislation, with effective dates.