Having published a 158 page Employment Rights Bill containing some of the most significant interventions in the UK labour market for decades, you might be forgiven for thinking that the Government would let the dust settle a little. But, clearly not intending to rest on its laurels, the Government is now consulting about even more far-reaching proposals.
To recap, the Employment Rights Bill will create two new categories of automatically unfair dismissal:
- where employees are fired for refusing to agree to a contractual variation; and
- where employees are fired so that they can be replaced with employees on varied terms,
in both cases, except where the variation is necessary to save the business as a going concern.
It will also remove the “at one establishment” test for determining whether an employer has reached the threshold for carrying out collective redundancy consultation. As a result, redundancies at different sites will need to be aggregated when assessing whether 20 or more redundancies in 90 days are proposed. Currently, a failure to consult collectively when required can lead to a tribunal making a "protective award" of up to 90 days' pay per employee.
The new consultation is looking at further changes which would impose stricter penalties on employers which fail to comply.
Collective redundancies: the Government is consulting on increasing protective awards, either to 180 days' pay or removing the cap altogether.
Interim relief: The government is also seeking views on whether “interim relief” should be available to employees who bring claims for the protective award.
Interim relief is a remedy which currently applies only in automatically unfair dismissal claims connected with whistleblowing, health and safety and certain other claims. It allows a successful applicant to be reinstated (or at least receive full pay) until their substantive claim is heard by the Tribunal at a full trial. Applications for interim relief are rare and usually unsuccessful. That's partly because the claimant must make the application within 7 days of dismissal, at a stage when many claimants will not have sought legal advice. But the difficulties don't end there. The claimant must show that they are likely to succeed at trial. This is a high hurdle, particularly when the respondent won't yet have disclosed relevant documents to the claimant. In whistleblowing claims, for example, it's challenging for the claimant to convince the Tribunal that they are likely to succeed in showing that their protected disclosure caused the dismissal, since this is often about the mental processes of the decision-maker.
However, claims for protective awards are much less concerned with the employer's motive - the issue is much more objective: whether 20 or more redundancies were proposed to take place in a 90 day period. If the Government goes ahead with this proposal, we're likely to see more successful applications for interim relief. And it will be a fearsome financial penalty for employers - with Tribunal claims easily taking over a year to reach trial, that could be an extra year's pay on top of a (possibly increased) protective award.
The government is also seeking views on whether interim relief should be available to employees who are bringing an automatic unfair dismissal claim arising from fire and rehire. Again, such applications would most likely have better chances of success than under the current framework, because they will largely turn on whether the employer was in severe financial distress. The threat of such applications would be a strong disincentive for employers considering fire and rehire to make savings, as any savings could be wiped out by successful applications.
Whether these proposals eventually become law is yet to be seen - but they underline that the change of government means a starkly different approach to labour market regulation. UK employment law is very definitely under new management.
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