As you will know from our previous bulletins, the Government has
proposed a number of reforms to streamline employment process and
to boost employer confidence. On 14 September 2012, Business
Secretary Vince Cable provided further details on which proposals
were to be given an A* and which proposals were to be sent to
Settlement Agreements – it is
proposed that compromise agreements will be renamed as
"settlement agreements". A statutory ACAS code will also
be established which will include:
> optional model letters
– for initiating the settlement process;
> optional model compromise
agreement – with a view to reducing employer drafting
> guidance on severance
The intention is that settlement
discussions will remain "off the record" so they cannot
be relied upon by the employee in the Tribunal. However, that
protection will fall away if the discussions are used as a way to
discriminate against the employee.
At present, there are no plans to
scrap the need for independent legal advice to conclude the
Unfair Dismissal Compensation –
consultation has begun on lowering the compensatory award
(currently at £72,300). Proposals include a cap of up to 12
months' pay or a new reduced upper limit based on between one
and three times median annual earnings (currently £25,882 and
Tribunal Process – the main plans
would see Tribunals given greater powers to dismiss weaker claims
and the ability to reduce the number of preliminary
Compensated No Fault Dismissals –
these have been ruled out. Instead, the plan is to provide greater
guidance around the ACAS code on Disciplinary and Grievance
TUPE – wide ranging feedback is
being sought on a number of key areas including whether service
provision changes should remain; the date employee liability
information must be provided and whether a change of workplace
location can constitute an economic, technical or organisational
We are moving slowly but surely towards reform, but when the
reforms do eventually come, we do not anticipate that they will be
If you would like some light reading the consultation papers and
proposed templates can be found here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In October 2012, the Court of Appeal confirmed that a Service Provision Change ("SPC") TUPE transfer can only occur where the client who receives the service, before and after the change, remains the same (Hunter v McCarrick  EWCA Civ 1399).
Following much debate, on 24 April 2013 the House of Lords finally gave its approval to employee shareholder status which will now take effect from Autumn 2013.
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