Employment Law Discussion Paper

Employment Law Discussion Paper

May 2012

1 Foreword 1.1

The recent announcements by the UK Business Secretary, Vince Cable, on the Coalition Government’s plans to conduct a fundamental review of employment law, have created significant interest here in Northern Ireland.

1.2

Northern Ireland is the only region of the United Kingdom where employment law is devolved. I appreciate that there may be an expectation that my Department will simply Dr Stephen Farry MLA mirror the UK Government‘s review, initiating public consultations on individual policy areas to the same timescales as in the rest of the UK. However, I believe this approach would not be consistent with the Programme for Government, which is about developing regional solutions that are more sensitive to the particular needs of individual citizens and local businesses.

1.3

With this in mind, I have had initial meetings with the key stakeholders to get a better understanding of the critical issues that need to be addressed here in Northern Ireland. Employer representative bodies are advocating a lighter touch to employment regulation on the basis that this will build business confidence and encourage employers to increase their workforce. Conversely, the trade union movement believe that a number of the UK proposals are about weakening the existing framework of employment rights and that this will have an adverse effect on the economy.

1.4

Where there has been consensus is on the need to have a wider debate as to how the current framework of employment law can be improved for the mutual benefit of individual employees and the business community.

1.5

Any review needs to build on the very positive policy initiatives that my Department has taken forward in partnership with key stakeholders. The 2011 Employment Act, which changed fundamentally the way workplace disputes are resolved, demonstrated the value-added of the Department working in partnership with stakeholders to achieve a NIspecific policy solution. I am persuaded that a similar approach to a more fundamental review of employment law is the right approach.

1.6

In the Executive’s Economic Strategy, I have already committed my Department to a review of employment law which will “seek to stimulate business confidence whilst maintaining the rights of individual employees”. I believe that this sets a unique challenge which can only be met through joint working and a willingness to look for solutions that promote equitably the needs and interests of individual employees and businesses. As a first step, I want to initiate meaningful dialogue with

the employment relations stakeholder community, to determine the scope and sequencing of the policy areas to be covered in any review of employment law. 1.7

The purpose of this discussion document is to provide key stakeholders with an understanding of what is being proposed by the UK Government and where those proposals sit in the context of current employment relations developments here in Northern Ireland. What we need to achieve collectively is an understanding of what are the policy and practice issues that need to be taken forward here in Northern Ireland as a matter of priority.

1.8

I would emphasise that this is not a consultation on fixed proposals. Instead, I am outlining some areas for possible reform. But equally, I am seeking views on whether there are alternative issues where reform would make a positive impact. Stakeholders and the public have the opportunity to shape policy now, before we develop firm options for change.

1.9

We are in challenging times and it is critical that we work together to develop innovative regional solutions that stimulate business confidence whilst maintaining the rights of individual employees. I would encourage all stakeholders, in responding to the range of proposals set out in this discussion, to focus on the key actions which will help to create a regulatory framework that enjoys the confidence of employees and the business community.

DR STEPHEN FARRY MLA Minister for Employment and Learning May 2012

2 Introduction 2.1

The Department is committed under the Executive’s Economic Strategy, to conduct a review of employment law. The review will be carried out in line with Better Regulation principles to identify opportunities to reduce the regulatory burden on businesses whilst maintaining the rights of individual employees.

2.2

The scope of the review of employment law in Great Britain is significant and the Department has structured this discussion paper to facilitate stakeholders’ consideration of the range of policy proposals. The GB review proposals fall under three broad themes: 

early resolution of workplace disputes;



efficient and effective employment tribunals; and



measures to reduce the regulatory burden of existing employment legislation.

2.3

Under each of the themes, the paper starts with a brief overview of recent developments here in Northern Ireland. The Minister for Employment and Learning is committed to taking forward a review that builds on existing good practice and, therefore, it is important that stakeholders are aware of recent NI policy and legislative changes. The paper then sets out the policy intention behind each of the individual GB proposals and how they might relate to the Northern Ireland context.

2.4

The Department does not want to be directive in terms of how stakeholders respond to this discussion paper, but would offer the following general prompts which individual organisations may find helpful in framing responses to the range of policy proposals.

2.5



Is there merit in considering each of the individual GB proposals for introduction in Northern Ireland?



If so, what are the key issues to be explored?



Are there alternative proposals that merit consideration?



Is the status quo a preferred option?

It is for individual stakeholders to determine the extent and nature of their response. The Department will be pleased to receive responses to some or all of the policy issues or, alternatively, some stakeholders may wish to provide more general responses. Anyone wishing to discuss further any of the issues raised in the discussion document, in advance of submitting a response, should contact Tom Evans (Tel: 028 9025 7520) or Conor Brady (Tel: 028 9025 7556).

2.6

The Department is seeking responses by 20 July 2012. Responses should be submitted to: Post: Employment Law Review Employment Relations Policy and Legislation Branch Room 203 Adelaide House 39-49 Adelaide Street BELFAST BT2 8FD E-mail: [email protected] Telephone: 028 9025 7580 Fax: 028 9025 7555

2.7

Please indicate in your response whether the views you are expressing are your own individual views or those of the organisation you represent.

2.8

If you think that any organisations or individuals are likely to have an interest in this consultation, please let us know their contact details.

Alternative formats 2.9

This paper and other Departmental publications may be made available in alternative formats upon request.

3 Early Resolution of Workplace Disputes CURRENT POSITION IN NORTHERN IRELAND 3.1

The Department recently conducted a fundamental review of the current dispute resolution systems which resulted in the passage of the Employment Act (Northern Ireland) 2011 and the establishment of a dispute resolution system that differs significantly from that in the rest of the UK. The key developments resulting from the review are: 

retention of the statutory procedural framework governing most disciplinary issues and dismissal situations (in GB the procedures have been repealed);



repeal, as in GB, of the statutory grievance procedures;



the introduction of a revised Labour Relations Agency (LRA) Code of Practice on Discipline and Grievance;



the introduction of an enhanced LRA pre-claim conciliation service;



increased focus on the use of mediation; and



the development of an enhanced arbitration scheme, covering all discrimination and non discrimination jurisdictions, due to be introduced in 2012.

UK GOVERNMENT PROPOSALS 3.2

The UK Coalition Government’s employment law review deals with a range of matters concerned with resolving disputes arising in the workplace. Even though the Department has only recently completed an extensive review of its own, and implementation of the recommendations is still ongoing, there is merit in establishing whether the following GB proposals should be considered as part of a NI review of employment law.

Early conciliation 3.3

Currently, individuals who believe their employment rights are being infringed are entitled to submit a claim to an industrial tribunal or, where relevant, the Fair Employment Tribunal. When the Office of Industrial Tribunals and the Fair Employment Tribunal (OITFET) receives the claim, a copy of it is sent to LRA whereupon the Agency offers to the parties its conciliation services in an effort to resolve the dispute without the need to continue the legal process.

Very much the same process operates in respect of Employment Tribunals in Great Britain, where the conciliation body is ACAS. 3.4

Under the Coalition Government’s proposals, the process for submitting a complaint to an Employment Tribunal in Great Britain would be changed. Individuals alleging a breach of their employment rights would have to submit their dispute to ACAS rather than the Employment Tribunal in the first instance. Whilst the parties to the dispute will be under absolutely no obligation to engage with the ACAS conciliation service, and may decide to send a claim to tribunal at this stage, the intention behind this proposal is to encourage a greater number of workplace disputes to be resolved without the need for legal proceedings.

3.5

Requiring all potential tribunal claims to be directed through ACAS could encourage disputing parties to focus more than they do at present on the possibility of reaching an agreed settlement. This would certainly be in keeping with the Department’s policy of promoting Alternative Dispute Resolution (ADR) mechanisms to resolve more disputes at an early stage, to avoid unnecessary and potentially costly legal proceedings.

3.6

However, there is the counter argument that an additional mandatory process may achieve little more than a symbolic shift of administrative functions from OITFET to the LRA. Since tribunal claims are already copied by OITFET to the LRA, there are already opportunities to encourage resolution in very much the same stage of the dispute.

3.7

The Department did consult on the option of making ADR mandatory (and indeed on ‘incentivising’ it) during the recent review of workplace dispute resolution systems and there was only limited support for this proposal. Nevertheless the Department is interested in hearing the views of stakeholders on the merits of the GB proposal.

Rapid resolution 3.8

The UK Government is considering the introduction of a scheme to provide quicker, cheaper determinations of low value, straightforward claims (e.g. in relation to holiday pay) as an alternative to determining such cases as part of a traditional tribunal process. BIS is still considering how this might be achieved and the Department will assess whatever proposals emerge.

3.9

Northern Ireland experience to date suggests that that greater efficiency in dealing with simpler cases can be achieved through refinements to the current tribunal case management systems and that there may not be a requirement for a new scheme. The tribunal judiciary has taken steps to improve case management processes, and will continue to look for opportunities to improve the effectiveness of the current arrangements.

3.10

The Department is nevertheless interested in hearing whether there might be better ways of dealing with simpler disputes than the tribunal system currently provides.

Mediation 3.11

The Department for Business, Innovation and Skills (BIS) in Great Britain has announced that it intends to work with the mediation industry and key stakeholders through a number of initial pilot exercises, to establish whether and to what extent mediation can offer an effective solution to employment disputes.

3.12

The Northern Ireland review of dispute resolution has already recommended much greater use of mediation and other ADR mechanisms such as conciliation and arbitration, and the LRA as a consequence is diversifying its portfolio of services – not least with the planned introduction later this year of new statutory arbitration arrangements designed to provide an alternative to tribunal proceedings.

3.13

An important recommendation emerging from the Northern Ireland review was a proposal to consult stakeholders on the possibility, value and practicalities of establishing a professional ADR network, possibly underpinned by a code of ethics, continuous professional development, and a professional register for appropriately qualified practitioners. This discussion paper invites views on whether such a network would have value and, if so, how it might operate.

4 Efficient and Effective Employment Tribunals CURRENT POSITION IN NORTHERN IRELAND Process and legislative improvements 4.1

In response to feedback from users, much positive work has been done in recent years to improve the efficiency and effectiveness of employment related tribunals in Northern Ireland. Operationally, the judiciary and administrative staff have worked to improve systems. A robust Case Management Discussion system has been developed that requires parties to detail or narrow the issues of the case, introduces timetabling for exchange of documentation, agrees the use of witness statements and the date for listing the case for full hearing. The President of the Tribunals has also introduced a rigorous postponement policy which requires parties to justify applications for the deferral of a hearing. The tribunal secretariat is also subject to challenging listing targets which are reported upon annually.

4.2

In a further move to promote efficiency, the Department has removed a legislative requirement that two separate tribunal processes are conducted where a claim relates to an alleged breach of fair employment legislation but also includes other industrial tribunal jurisdictional matters.

4.3

Finally, a Memorandum of Understanding has been agreed between the LRA and OITFET to facilitate closer joint working, specifying how the two organisations will work together to maximise opportunities to resolve disputes without the need for a tribunal hearing.

Rules of Procedure 4.4

A significant development since the conclusion of the dispute resolution review has been the establishment of a new Standing Advisory Committee on the Tribunal Rules of Procedure (‘Rules Committee’) to consider the effectiveness of the current Rules and recommended changes where appropriate.

4.5

The Rules of Procedure governing the conduct of employment-related tribunals are set out in two separate but similar Statutory Rules, the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 and the Fair Employment Tribunal (Rules of Procedure) Regulations (Northern Ireland) 2005. The Rules specify, among other things, the processes for dealing with claims and responses, requirements around conducting hearings, the process for reviewing a decision and the circumstances in which an award of costs may be made.

4.6

The purpose of the Rules Committee, as its name suggests, is to advise the Department on possible changes designed to improve processes set out in statute which govern the operation of tribunals. The expert group consists of members of the tribunal judiciary, representatives of tribunal users, and officials from the Department with responsibility for policy and legislation. A key challenge will be to develop a consolidated set of rules that take account of the many changes over the last 10 years.


With the above arrangements in place, Northern Ireland is already well positioned to consider the recommendations expected to be produced in the near future by a review committee, led by Mr Justice Underhill, which has been tasked with taking forward a root and branch review of the Employment Tribunal Rules operative in Great Britain.

4.8

The Northern Ireland Rules Committee will be paying close attention to the outcome of the Underhill review, but the Department is also interested in the views of stakeholders on whether there are any pressing issues that might be addressed by way of a future amendment to the tribunal rules.

4.9

Although the Underhill review will examine a wide range of issues, the UK Government has already reached policy decisions on a number of matters, and again the Department would welcome views on whether comparable steps are necessary or appropriate in Northern Ireland.

4.10

The Department would welcome views on the GB approach which provides for the establishment of an expert user group, drawn from the key stakeholder organisations, to provide advice and direction to the Rules Committee on aspect of the Rules that are problematic from a user’s perspective.

Witness statements 4.11

The UK Government has announced that witness statements before Employment Tribunals are now to be ‘taken as read’ to speed up tribunal proceedings. Practice to date in Great Britain has not been uniform, but in many cases the reading of witness statements where issues are already known and understood has been seen as wasteful of the tribunals’ and parties’ time. Whilst there may be rare circumstances in which the reading aloud by a party of a witness statement, or part of it, may assist the tribunal in its consideration of the case, the default position will now be that witness statements are taken as read.

4.12

Similar practice is already being introduced into Northern Ireland’s tribunals, following discussion with tribunal users, and the Department considers that it is appropriate for tribunals to continue to approach this matter within the overriding objective of dealing with cases justly, as set out in the Regulations establishing the Rules of Procedure.

Chairs sitting alone in unfair dismissal cases 4.13

In Great Britain, action is also being taken to provide a discretionary power to allow employment judges to hear unfair dismissal cases alone, without the need to be accompanied by lay panel members. The UK Government’s rationale is that many cases do not require a full panel to hear and determine the issues, and that it is appropriate in such cases to take steps to save taxpayers’ money by drawing on the judge’s legal expertise alone to decide the case.

4.14

Employment judges and their Northern Ireland counterparts, the chairmen of industrial tribunals and the Fair Employment Tribunal, are already granted comparable discretion to sit alone to hear cases in relation to a range of generally more straightforward matters (or jurisdictions) that come before tribunal. In one interpretation, adding unfair dismissal to this list is simply an extension of an existing arrangement that reduces expenditure by the state whilst ensuring that there is a discretionary power to hold a full panel hearing where appropriate. However, in common with a number of consultees in Great Britain, some Northern Ireland stakeholders may feel that it is inappropriate to establish a new default position when unfair dismissal cases often turn on fact rather than legal complexity and therefore benefit from the practical workplace experience-based input of lay panel members.

4.15

The Department would be interested to hear opinions on whether greater discretion should be extended to allow chairmen to sit alone in unfair dismissal cases. Further, stakeholders are asked to comment on the potential merits of a wider extension of this arrangement; if such an extension is merited, to which further jurisdictions should it apply?

Witness expenses 4.16

A further decision designed to reduce expenditure on the tribunal system centres around witness expenses, which are currently reclaimable from the state. The UK Government now intends to bring forward a rule change to empower tribunals and employment judges to direct parties to bear costs of witness attendance, where a witness has attended pursuant to a witness order, with the losing party ultimately reimbursing the successful party for any such costs already paid out. It is not proposed to means test this system, as establishing relevant machinery is predicted to cost more than Government would save. The Department would welcome thoughts on whether this proposal is suited to Northern Ireland tribunals.

Charging fees to use tribunals 4.17

One of the UK Government’s more contentious announcements is the commitment to introduce charging for the use of Employment Tribunals. At the time of writing, two potential models are envisaged:

(i).

a fee payable on lodgement of a claim and subsequent fee for bringing the matter to hearing, the level of such fees being dependent on the complexity of the claim; and

(ii).

a single fee covering both lodgement of a claim and any subsequent hearing, the level depending on the nature of the claim and the amount of the award sought.

4.18

Whichever option is selected, further fees will also form part of the new arrangements. These will be applied, respectively, to a request for written reasons; a review application; a request to dismiss a claim following settlement or withdrawal; the setting aside of a default judgement; lodgement of a counter-claim; and judicial mediation.

4.19

In establishing the fees regime, it is proposed that a remission system will operate to assist those who, in its absence, would be unable to access the tribunal.

4.20

A number of arguments may be advanced in favour of the proposal. Aside from the principle of transferring cost from state to service user – a principle that is already operative in the courts – a price mechanism could help to incentivise more reasonable behaviour in dealing with workplace issues, bringing about earlier resolution. A further argument in favour of the change is that it has the potential to deter individuals from bringing tribunal claims that have little or no merit. These claims, business interests in particular argue, are a significant drain on employer resources.

4.21

The counter argument is that the introduction of fees will place restrictions on access to the justice system, particularly for the more vulnerable in society, and could lead to legitimate claims not being pursued for want of funds. Moreover, there are those who would question whether there is any hard evidence of a significant volume of vexatious cases within the system. It is possible, for example, to point to the very infrequent use of a facility within the existing tribunal rules that has the potential to ‘weed out’ weak cases. The provision allows a party to request an order requiring the other party to pay a deposit of up to £500 in order to continue with proceedings. The tribunal chairman may choose to issue such an order where he or she takes the view a party’s contentions have little prospect of success. The Department would welcome feedback on the advantages and disadvantages of introducing a fees regime.

4.22

The question for this discussion document is whether the Department should consult on the same basis or start with the more fundamental question: should fees be introduced at all?

Pre-hearing deposit 4.23

Following on from the above discussion, it is worth referring to the BIS decision to double the maximum level of the pre-hearing deposit to £1,000. This is an area that has already undergone some consideration in Northern Ireland during the recent dispute resolution review. Some of those who

responded to the review as well as, more recently, the tribunal Rules Committee, felt that an increase could be justified on the basis that it would act as a more effective deterrent against claims having little merit. 4.24

Although the deposit mechanism has been seldom used, and it is therefore difficult to adduce evidence as to its effect, the Department stated in its policy response to the dispute resolution review that it would explore options for revising the upper limit, factoring into that consideration individuals’ ability to pay. Most recently the non-use of deposit hearings was raised by the tribunal judiciary at a tribunal users meeting. This has acted as a catalyst for a number of applications for deposit hearings which have had positive outcomes in terms of case management. However, all of the recent applications for a predeposit hearing have come from respondents and the Department would want to stress that this facility is equally available to both claimants and respondents. The Department would welcome views on the use of deposit hearings and the GB proposals to increase the maximum level.

Costs 4.25

Also considered during the dispute resolution review was the possibility of increasing, from its current level of £10,000, the ceiling on the level of costs a tribunal or chairman can order to be awarded. A costs award may be made against a party where that party has brought or conducted the proceedings in a manner deemed inappropriate, 1 and the tribunal or chairman is empowered to take into account a party’s ability to pay.

4.26

In Great Britain, a decision has been taken to double the relevant maximum to £20,000; however, in Northern Ireland, the Department concluded in response to feedback from the review that it would not be appropriate to effect change at that time, other than to address an anomaly which can occur where a tribunal refers costs to be assessed in a county court. 2 Consultees are invited to consider whether there is justification, in light of the changes in Great Britain, for reviewing the position with regard to costs.

Financial penalties 4.27

1

The UK Government envisages giving Employment Tribunals discretion to levy a financial penalty, payable to the Treasury, on employers found to have breached employment rights. The detail underpinning this policy change remains to be worked out; however, consultees may wish to express a view on its potential applicability to Northern Ireland.

A costs order may be made to facilitate recovery of costs occasioned by a postponement or adjournment caused by a party. Such an order may also be made against a party in the following circumstances: “where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.” Finally, a costs order can be made against a party who has not complied with an order or practice direction. 2 Under current arrangements, a legislative lacuna presents an obstacle to a county court assessing costs in accordance with the corresponding process in Great Britain. A legislative amendment will be required to address this situation.

5 Better Regulation Measures CURRENT POSITION IN NORTHERN IRELAND 5.1

The Department is already engaged in an initial examination of employment legislation, seeking to identify opportunities to lessen regulatory and administrative costs. In related work, the Department has also commissioned research to identify the main challenges faced by Northern Ireland Small and Medium Enterprise (SME) sector in discharging employment rights and relations responsibilities. The Department has moved to a risk-based approach to enforcement/inspection in relation to the regulations that govern the conduct of employment agencies and employment businesses.

5.2

The UK Government has already announced a series of proposals which have a better regulation focus. Whilst some of these proposals may not be relevant, the Department considers that it is appropriate to seek the views of stakeholders on their applicability to the Northern Ireland context, in the course of this review.


Before examining each of the individual proposals within the particular Northern Ireland context, it is worthwhile setting out two particular issues which the Department is already examining in collaboration with BIS on a UKwide basis: - Compromise Agreements; and - TUPE.

Renaming of Compromise Agreements as Settlement Agreements 5.4

A compromise agreement is a legally binding agreement (if properly concluded) between an employer and an employee to settle an existing or potential claim to an Industrial or Fair Employment Tribunal. In effect, the employee agrees to ‘settle out of court’ by accepting the financial or other compensation that the employer is offering in return for signing away his/her right to pursue a claim. The agreement must meet certain requirements to be viewed as legally binding including being in writing, signed by both parties, and being concluded following receipt by the employee of independent legal advice.

5.5

Following consultation, BIS is proposing to rename compromise agreements as ‘settlement agreements’, a process which will require primary legislation. The rationale behind this proposal is that the term ‘settlement agreement’ more accurately describes the agreement’s content and will help to remove

any negative perceptions that parties who utilise this option are indirectly admitting liability. 5.6

The Department has already written to key employment relations stakeholders to seek their views on this issue. The proposal is not viewed as being controversial, as the processes that underpin such agreements are not being amended. Once stakeholders have contributed their views on the proposed change, the Department will determine whether Northern Ireland should be included in any legislative changes that need to be made on a UK-wide basis.

5.7

Although the Department is not proposing to review the processes that underpin compromise agreements at this time, it is nonetheless open to receiving evidence as to the effectiveness of the current arrangements and any significant issues experienced by those who operate them.

Transfer of Undertakings (Protection of Employment) (NI) Regulations 2006, and the Service Provision Change (Protection of Employment) (NI) Regulations 2006 5.8

BIS launched a call for evidence on the effectiveness of the UK-wide TUPE Regulations in November 2011. The Department issued a similar call for evidence to NI stakeholders in December 2011, seeking their views on TUPE and the related Service Provision Change Regulations, which apply to Northern Ireland only. The call for evidence closed on 31 January 2012. Six responses were received from Northern Ireland stakeholders and these were forwarded to the Assembly Employment and Learning Committee prior to transmission to BIS.

5.9

BIS officials have confirmed that a summary of the evidence will be published in due course, and the Department will provide input as appropriate. It is likely that a full consultation will be held later in 2012.

5.10

Early indications of possible areas for change include transparency of information provided to transferees, extending the length of the two-week information-sharing period between companies, and the administration around post-transfer harmonisation. These matters will, however, be discussed in full in due course.

Change in qualifying period for exercising right to claim unfair dismissal 5.11

Under current legislation in both GB and NI, employees must work for a period (qualifying period) of at least one year before they become entitled to exercise the right to lodge a tribunal claim for unfair dismissal. In November 2011, the UK Government announced that the qualifying period would rise to two years in GB and this legislative change was introduced in GB from 6 April 2012.

5.12

The UK Government’s rationale for this policy in GB is to promote the necessary business confidence that encourages employers to increase their

workforce without undermining workers’ sense of job security. BIS, in its impact assessment on Resolving Workplace Disputes, stated that the current accrual period for unfair dismissal rights brings the additional risk to an employer of an unfair dismissal claim, which is great enough in some instances to deter firms from employing additional people and is therefore a potential barrier to growth and employment. The current qualifying period, it is argued, is insufficient to allow an employer to fully assess an employee’s performance and to resolve any problems. BIS has indicated that this change is likely to result in a modest reduction (1,600-2,100) in the number of tribunal claims. 5.13

One of the difficulties associated with this proposal is assessing with any degree of certainty the likely impact of this policy proposal. The BIS impact assessment reflects this in noting that “it is not possible to directly quantify the likely impact on business confidence and in turn on hiring behaviour”, and that “detecting any effect is challenging”. Given the wide range of external variables, the assessment has been unable to establish a direct link between the level of unfair dismissal claims and changes in the qualifying period.

5.14

The Department would nevertheless be interested in the views of stakeholders as to whether the proposal merits further examination.

Collective Redundancies 5.15

The Employment Rights (Northern Ireland) Order 1996 (the 1996 Order) places a duty on an employer proposing to make collective redundancies to consult in advance with representatives of the employees. No notices of dismissal can be issued until the consultation has been completed. The 1996 Order states that employers proposing to dismiss between 20 and 99 employees should begin consultation at least 30 days before the redundancy notices take effect. Where more than 100 employees are concerned, consultation must begin at least 90 days before the redundancy notices take effect.

5.16

In November 2011, BIS issued a call for evidence on the operation of the requirements for collective redundancy consultation to explore how the rules for consultation could be improved, and on whether guidance and best practice examples could help consultation be conducted more effectively. The main aim was to consider whether the 90-day consultation period for more than 100 redundancies can be reduced to 60, 45 or 30 days.

5.17

The purpose of the call for evidence was to establish what impact the current rules on collective redundancy consultation have on business confidence and flexibility to respond effectively and appropriately to market opportunities. It was also hoped to understand the challenges for business in pursuing collective redundancy consultation, including the barriers to starting consultation and achieving agreement. The UK government considers that there is a need to bring clarity to the existing arrangements for consultation with regard to collective redundancies.

5.18

As with the qualifying period for unfair dismissal, there is a lack of robust evidence, other than anecdotally, regarding how the proposed policy arrangements would work in practice. Nevertheless, it would be remiss of the Department, in light of the proposals in GB, to ignore the proposal entirely and not seek the views of local stakeholders.

5.19

To date, the Department has not received any representations on this policy proposal and we are therefore unsure as to whether there is any appetite locally for its introduction, or even its consideration. We would therefore be grateful to hear the views of local stakeholders as to whether such a policy change would make any measurable contribution to reducing the impact of employment legislation on businesses. We would also welcome any views on how/whether the current collective redundancies provisions could be improved or clarified.

Limits on certain employment rights related payments 5.20

5.21

Article 33 of the Employment Relations (Northern Ireland) Order 1999 provides that the limits on various statutory awards and payments under employment rights legislation are linked to the annual percentage change in the Retail Prices Index (RPI) between one September and the next. The limits include: 

“a week’s pay” for the purposes of calculating statutory redundancy payments;



the minimum amount of compensation awarded by industrial tribunals where an individual has been unlawfully expelled from a union in contravention of Article 38 of the Trade Union and Labour Relations (Northern Ireland) Order 1995;



the basic award of compensation made by an industrial tribunal for unfair dismissal;



the limit on guaranteed payments when workers are not provided with work; and



the basic award for unfair dismissal in health and safety cases.

The UK Government has committed to amending the formula governing the annual change to the value affected payments so that rounding is more precise. The Department views this as a reasonable proposal and, subject to being persuaded by any strong arguments to the contrary, intends to follow suit. We would nevertheless be grateful for any views on whether this issue requires further and deeper consideration.

Proposal to introduce compensated no fault dismissal for micro firms 5.22

In November 2011, the UK Government stated that it would seek views on a proposal that evolved from the ‘Beecroft Report’ to introduce compensated

no-fault dismissal for micro firms – i.e. firms with ten or fewer employees. A system of compensated no fault dismissal would allow employers to dismiss staff with basic redundancy pay and notice; employees in these circumstances would have not have recourse to an unfair dismissal claim. At the time of the announcement, it was stressed that the Government would be seeking evidence on both sides and that a call for evidence would issue in due course. 5.23

The rationale behind such a policy would be to boost employment by alleviating the risk for smaller employers of hiring new staff who may prove to be unsuitable, or at least change the perceptions of smaller employers in respect of barriers to growth.

5.24

There has been a recent call for evidence in GB on this issue; however the Department is unaware of any concrete evidence either for or against the proposal. The Department would welcome views on whether this is a policy that merits further consideration.

Introduction of a system of protected conversations 5.25

BIS also announced in November 2011 that it would consider introducing a system of ‘protected conversations’, which would allow employers to raise issues such as poor performance or retirement plans in an open way, free from the worry that these discussions will be used as evidence in a subsequent tribunal claim.

5.26

In particular, it is understood that employers have expressed concern that the offer of a settlement agreement to terminate an employment relationship may lead to a tribunal claim for unfair dismissal or constructive dismissal.

5.27

It is understood that BIS will consult on proposals within a short period. Until the detailed proposals are known, the precise rationale for the policy is not clear. However the CBI in Northern Ireland, in its Unlocking Employment survey of late 2011, states that ‘protected conversations’ could be used to discuss an employee’s retirement plans in the absence of a default retirement age, without the threat of the conversation being used in evidence at a Tribunal.

5.28

Similarly, it may be appropriate for some form of legal process to allow settlement agreements to be offered on a ‘without prejudice’ basis.

5.29

At this stage, there appears to be a limited evidence base in this area, but the Department would appreciate views on whether the proposals merit further consideration.

Review of employment regulations 5.30

Stakeholders may already be aware that BIS is responsible for the Red Tape Challenge, which invites the public to comment on existing regulations and propose whether they be amended or scrapped. As noted in the introduction

the Department is taking forward a pilot to establish a methodology for a more fundamental review of employment regulations here in Northern Ireland. 5.31

It is the Department’s intention to identify three sets of subordinate legislation to be considered as part of this pilot. A line-by-line scrutiny of the three sets of regulations will then be conducted to determine the need for, and adequacy of, those provisions, and to establish the methodology for a review of all employment regulations. The overall aim of such a review would be to reduce the aggregated burden of regulations, by reducing the stock of regulations that are currently in place. This may be achieved either through the consolidation of different sets of regulations, or potentially by removing regulations entirely from the statute book if it is found that they are no longer required, or the policy intention can be substantively achieved through the provision of better information and guidance, for example.

5.32

The Department would appreciate views on specific regulations that would be appropriate for inclusion in this review and how stakeholders can input to the review process.

Reform of the Recruitment Sector 5.33

The UK Government intends to consult in the Summer of 2012 on proposals to streamline the current regulatory arrangements governing the conduct of employment agencies and employment businesses. These proposals follow on from the recommendations emerging from the Red Tape Challenge and the Workplace Rights Compliance and Enforcement Review.

5.34

The Conduct Regulations, which govern the private recruitment sector, are considered by some to be a barrier to entry for new recruitment businesses. For others, however, compliance with the demands of the Conduct Regulations is a way of demonstrating good customer service and the provision of employment protections.

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The Department intends to monitor the development of any proposals in GB to streamline this legislation, and gauge whether similar changes would be appropriate for Northern Ireland. In the interim, however, the Department would appreciate any views as to whether a rationalisation of the Conduct Regulations would be welcomed, or are the Regulations considered to be “fit for purpose” in their current form. If the Department receives sufficient indication that this is an area for further work, then we would anticipate carrying out more detailed exploratory discussions with stakeholders who would have an interest in this specific sector.

Further information: Employment Relations Policy and Legislation Branch Department for Employment and Learning Room 203 Adelaide House 39-49 Adelaide Street Belfast BT2 8FD

Tel: 028 9025 7580 Fax: 028 9025 7555 Email: [email protected] web: www.delni.gov.uk