Government publishes Enterprise and Regulatory Reform Bill

The Government has published the Enterprise and Regulatory Reform Bill, which includes measures making changes to the employment tribunal system and dispute resolution processes. 

In the Queen's Speech on 9 May 2012, the Government confirmed its commitment to reforming the employment tribunal system and said that it would introduce an Enterprise and Regulatory Reform Bill to effect this. It has now published the Bill. 

The Bill contains a range of measures aimed at promoting growth and reducing regulatory burdens on businesses. Relevant to employment law, when enacted the Bill will:

  • require claimants in an employment dispute to send information to Acas for it to attempt a settlement, before lodging their claim;
  • allow for certain employment tribunal claims to be heard by legal officers (who will be appointed in accordance with regulations) if the parties agree;
  • change the Employment Appeal Tribunal (EAT) rules so that appeals to the EAT will be heard by a judge sitting alone, unless a judge directs otherwise;
  • give the Secretary of State the power to change, by order, the limit on the amount of the unfair dismissal compensatory award to median annual earnings, three times median annual earnings or 52 times the week's pay of the claimant concerned;
  • introduce a power for employment tribunals to order employers that have breached workers' rights to pay a financial penalty of between £100 and £5,000 where there are "aggravating features", the penalty being, in most cases, 50% of the amount of any award that the tribunal has made against the employer;
  • rename compromise agreements "settlement agreements"; and
  • clarify that, to be protected against automatically unfair dismissal, whistleblowers must make their disclosure "in the public interest". 

The Government has already completed the consultation process on proposals to reform the employment tribunal system, including proposals to tackle weaker tribunal claims and introduce fees for bringing employment tribunal claims. See Employment tribunal system to be reformed for further details on the Government's proposals. 

According to the Government, the Enterprise and Regulatory Reform Bill will also introduce provisions to address "the disconnect between directors' pay and long-term company performance by giving shareholders of UK quoted companies binding votes on directors' remuneration".  The Government is considering responses to its recent consultation on proposals to give shareholders binding votes on directors' pay and anticipates introducing provisions into the Bill during the parliamentary process. 


The XpertHR employment law manual sets out the current law on tribunal procedures and other methods of resolution and public interest disclosures (whistleblowing).