Employment Update: the Employment Bill 2001

Last Thursday the Government introduced the Employment Bill 2001 in the House of Commons. The Bill puts into legislative form many of the employment law proposals announced in recent months, including those on family-friendly rights and workplace disputes.

The Bill covers the proposed changes to maternity leave, paternity leave and adoption leave, although it does not contain the detail of most of the changes as these will be made by way of regulations under powers provided by the Bill. The changes were originally mooted in a Green Paper in December 2000, heralded in the March 2001 budget and flesh was finally put on the bones in the framework documents published for consultation in May. Consultation ended on 8^th August and there appears to be little change to the substance of the proposals. There is no change to the proposed implementation date of April 2003. In summary, the Bill includes the following provisions:

• men in a parenting role (to be specified in regulations) who have sufficient service will be entitled to a single block of up to two weeks' paternity leave within 56 days following the birth of a child in order to care for the child or its mother. Regulations will apparently specify that employees can only take this in complete weeks – i.e. the choice will be to take one, two or no weeks. Regulations will apparently provide that the service requirement will be 26 weeks' service by the fifteenth week before the child is due to be born.
• paternity leave is to be paid at the same rate as flat rate maternity pay – this will be set by regulations and in 2003 will be the lesser of £100 or 90% of the employee's average weekly earnings.
• adoptive parents will be entitled to adoption leave – this will be equivalent to paid ordinary maternity leave and unpaid additional maternity leave for one adoptive parent; where a married couple adopt, only one spouse can claim adoption leave and the other parent will be entitled to paid paternity leave. Regulations will set out the relevant notice requirements and conditions.
• changes to statutory maternity pay and maternity allowance provisions, including an extension of the payment period from 18 to 26 weeks and an increase in the period of notice to be given to employers from 21 days to 28 days (28 days is likely to be adopted as the required notice period across the board, i.e. for maternity, paternity, adoption and parental leave); reimbursement of paternity and adoption leave will mirror reimbursement of maternity pay.

The Government has re-confirmed that ordinary maternity leave (available to all employees) will be increased from 18 to 26 weeks, followed by 26 weeks' additional maternity leave (which it is intended will be made available to those with 26 weeks' service at the fifteenth week before the child is due). This is not contained in the Bill, however, as it will be given effect by regulations. The new rights will be in addition to the right to 13 weeks' unpaid parental leave.

At the end of July the Government put forward proposals for changes to the tribunal system in order to reduce the number of claims. Consultation ended on 8th October and most of the proposals are now included in the Employment Bill. One exception is the proposal to charge employees for bringing employment claims, which has been dropped in the face of heavy criticism from the TUC. The DTI press release states that these provisions will be implemented "once a full programme of advice and guidance to business, notably small business, and to individuals is in place". This could therefore be before the family-friendly changes are made in April 2003. The Bill provides for:

• measures to encourage employers to have and use internal disciplinary and grievance procedures: minimum statutory procedures (involving the written notification of the charge/grievance, a meeting to consider this, a written decision and the right to an appeal meeting) are to be made an implied term of all contracts of employment (which cannot be contracted out of). Dismissals in breach of these procedures will be automatically unfair (as well as being a breach of contract) and will give rise to minimum compensation of four weeks' pay. Tribunals will be able to vary compensatory awards made in respect of most claims that can be brought in a tribunal by up to 50% where employer or employee has failed to use the minimum statutory procedures. The Bill also gives the Secretary of State (after consultation with ACAS) the power to make regulations preventing complaints being presented to tribunals before the procedures have been completed.
• tribunals will be required to disregard procedural mistakes provided the minimum statutory procedures have been followed, if they would have made no difference to the outcome.
• the existing obligation to provide written statements of terms and conditions is to be widened to require all employers to provide full details of disciplinary and grievance procedures (although the employer can still put these details in a handbook and simply refer to the handbook in the written statement). (Currently there are reduced obligations for employers with under 20 employees). Employers will not be obliged to issue separate written statements if the required particulars appear in the contract of employment or offer letter. Failure to comply will only be penalised if the employee successfully brings one of certain statutory complaints (including unfair dismissal and discrimination claims) and the tribunal will then be able to award further compensation in respect of that complaint by between the greater of 5% or 1 or 2 weeks pay, and 25%.
• the requirement that statutory compromise agreements relate to a "particular complaint" will be removed so that they are effective to settle statutory claims whether or not particular claims have been "raised" by the employee (thereby reversing the effect of the decision in Lunt v Merseyside TEC Ltd 1999 [IRLR] 458).
• a statutory questionnaire for equal pay claims similar to those for discrimination claims. However, discrimination questionnaires need only be answered within a "reasonable time", whereas the Government intend to provide by regulations that the equal pay questionnaire should be answered within 8 weeks of receipt. A failure to respond may lead to an inference on the part of the tribunal.
• regulations may be made providing that ACAS has a duty to conciliate only for a fixed period (during which the fixing of a time and place for the hearing is postponed); after this has expired, ACAS will have a power but no duty to conciliate.
• regulations may be made obliging parties to bring and defend tribunal claims using prescribed (and more detailed) forms, possibly accompanied by certain documents such as the written statement of terms. Currently there is no obligation to use the forms IT1 and IT3 provided certain minimum information is given in writing.
• regulations may also be made to allow complaints to be determined without a hearing. This is intended for use where both parties agree, although it would be subject to the tribunal's right to require a hearing regardless of the parties' wishes. Regulations may also permit tribunals to strike out a case at a pre-hearing review in certain limited circumstances.
• the Bill permits regulations to be made to allow tribunals to make wasted costs orders against paid representatives and to order one party to pay compensation for the time that party spends preparing his case. These powers are intended only for use where there has been unreasonable conduct.
• the President of the Employment Tribunals is to be given power to issue practice directions to ensure consistency.

• union learning representatives are to be given proper status including rights to paid time off work.
• the Bill includes a power to make regulations prohibiting less favourable treatment of fixed term workers. There are already draft regulations made under the EU Directive on Fixed Term Work but the Government considers that the Directive does not cover pay and pensions. The Bill will therefore allow the Government to extend the protection to pay and pensions.

The Government has also announced the setting up of a new independent taskforce to advise on the implementation of reforms to the employment tribunal system. It will advise on how the system can be made more efficient and cost-effective and on operational aspects of policy changes.

"© Herbert Smith 2002

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