Enterprise and Regulatory Reform Bill

Session 2012 - 13
Internet Publications
Other Bills before Parliament

Enterprise and Regulatory Reform Bill

Enterprise and Regulatory Reform Bill
Part 2 — Employment
7

Procedure for deciding tribunal cases
10
Decisions by legal officers
(1)
In section 4 of the Employment Tribunals Act 1996 (composition of a tribunal),
after subsection (6C) insert—
“(6D)
A person appointed as a legal officer in accordance with regulations
5
under section 1(1) may determine proceedings in respect of which an
employment tribunal has jurisdiction, or make a decision falling to be
made in the course of such proceedings, if—
(a)
the proceedings are of a description specified in an order under
this subsection made by the Secretary of State and the Lord
10
Chancellor acting jointly, and
(b)
all the parties to the proceedings consent in writing;

and any determination or decision made under this subsection shall be
treated as made by an employment tribunal.”
(2)
In section 41(2) of that Act (orders etc subject to affirmative resolution
15
procedure), after “section 4(4)” insert “or (6D)”.
11
Composition of Employment Appeal Tribunal
(1)
The Employment Tribunals Act 1996 is amended as set out in subsections (2)
to (4).
(2)
In section 28 (composition of Appeal Tribunal), for subsections (2) to (4A)
20
substitute—
“(2)
Proceedings before the Appeal Tribunal are to be heard by a judge
alone.

This is subject to subsections (3) to (7) and to any provision made by

virtue of section 30(2)(f) or (2A).
25
(3)
A judge may direct that proceedings are to be heard by a judge and
either two or four appointed members.
(4)
If a judge gives a direction under subsection (3), there shall be an equal
number of—
(a)
employer-representative members, and
30
(b)
worker-representative members.
(5)
A judge may, with the consent of the parties, direct that proceedings are
to be heard by a judge and either one or three appointed members.
(6)
The Lord Chancellor may by order provide for proceedings of a
description specified in the order to be heard by a judge and a specified
35
number of appointed members.
(7)
An order under subsection (6) may include provision about how many
of the appointed members are to be employer-representative members
and how many are to be worker-representative members.
(8)
In this section—
40
“employer-representative members” means appointed members
whose knowledge or experience of industrial relations is as
representatives of employers;

Enterprise and Regulatory Reform Bill
Part 2 — Employment
8

“worker-representative members” means appointed members
whose knowledge or experience of industrial relations is as
representatives of workers.”
(3)
In section 30 (Appeal Tribunal procedure rules), in subsection (2)(f) (provision
for dealing with interlocutory matters), for the words from “otherwise” to the
5
end substitute “by an officer of the Appeal Tribunal”.
(4)
In section 41(2) (orders etc subject to affirmative resolution procedure), before
“or 40” insert “, 28(6)”.
(5)
In consequence of the amendment made by subsection (2), omit paragraph 46
of Schedule 8 to the Tribunals, Courts and Enforcement Act 2007.
10
Unfair dismissal
12
Power by order to increase or decrease limit of compensatory award
(1)
The Secretary of State may by order made by statutory instrument amend
section 124 of the Employment Rights Act 1996 (limit of compensatory award
etc) so as to vary the limit imposed for the time being by subsection (1) of that
15
section.
(2)
The limit as so varied may be—
(a)
a specified amount, or
(b)
a specified number multiplied by a week’s pay of the individual
concerned,
20

or it may be the lower of those things.
(3)
Different amounts may be specified by virtue of subsection (2)(a) in relation to
employers of different descriptions.
(4)
An amount specified by virtue of subsection (2)(a)—
(a)
may not be less than median annual earnings;
25
(b)
may not be more than three times median annual earnings.
(5)
A number specified by virtue of subsection (2)(b) may not be less than 52.
(6)
An order under this section may make consequential, supplemental,
transitional, transitory or saving provision.
(7)
The consequential provision that may be made under subsection (6) includes
30
provision inserting a reference to section 124 of the Employment Rights Act
1996 in section 226(3) of that Act (week’s pay: calculation date in unfair
dismissal cases).
(8)
A statutory instrument containing an order under this section is not to be made
unless a draft of the instrument has been laid before each House of Parliament
35
and approved by a resolution of each House.
(9)
In this section “median annual earnings” means—
(a)
the latest figure for median gross annual earnings of full-time
employees in the United Kingdom published by the Statistics Board
(disregarding any provisional figures), or
40
(b)
if that figure was published by the Statistics Board more than two years
before the laying of the draft of the statutory instrument in question, an

Enterprise and Regulatory Reform Bill
Part 2 — Employment
9

estimate of the current amount of such earnings worked out in
whatever way the Secretary of State thinks fit.
(10)
In section 34 of the Employment Relations Act 1999 (indexation of amounts
etc), after subsection (4) insert—
“(4A)
A reference in this section to a sum specified in section 124(1) of the
5
Employment Rights Act 1996 does not include anything specified by
virtue of section 12(2)(b) of the Enterprise and Regulatory Reform Act
2012 (specified number multiplied by a week’s pay of the individual
concerned).
(4B)
As regards a sum specified in section 124(1) of the Employment Rights
10
Act 1996, the duty under subsection (2) to make an order with effect
from 6 April in a particular year does not arise where an order varying
such a sum with effect from a day within 12 months before that date has
been made under section 12(1) of the Enterprise and Regulatory
Reform Act 2012.”
15
Financial penalties
13
Power of employment tribunal to impose financial penalty on employers etc
(1)
After section 12 of the Employment Tribunals Act 1996 insert—
“Financial penalties
12A
Financial penalties
20
(1)
Where an employment tribunal determining a claim involving an
employer and a worker—
(a)
concludes that the employer has breached any of the worker’s
rights to which the claim relates, and
(b)
is of the opinion that the breach has one or more aggravating
25
features,

the tribunal may order the employer to pay a penalty to the Secretary
of State (whether or not it also makes a financial award against the
employer on the claim).
(2)
The amount of a penalty under this section shall be—
30
(a)
at least £100;
(b)
no more than £5,000.

Subsections (3) and (4) have effect subject to the limits set by this
subsection.
(3)
If an employment tribunal—
35
(a)
makes a financial award against an employer on a claim, and
(b)
also orders the employer to pay a penalty under this section in
respect of the claim,

the amount of that penalty shall be 50% of the amount of the award; but
this does not apply where subsection (4) applies.
40
(4)
In relation to a claim considered by an employment tribunal together
with another claim involving a different worker but the same
employer, if the tribunal—

Enterprise and Regulatory Reform Bill
Part 2 — Employment
10

(a)
makes a financial award against the employer, and
(b)
also orders the employer to pay a penalty under this section,

the maximum amount of that penalty shall be 50% of the amount of the
award.
(5)
Two or more claims in respect of the same act and the same worker
5
shall be treated as a single claim for the purposes of this section.
(6)
Subsection (3) or (4) does not require or permit an order under
subsection (1) (or a failure to make such an order) to be reviewed where
the tribunal subsequently awards compensation under—
(a)
section 140(3) of the Trade Union and Labour Relations
10
(Consolidation) Act 1992 (failure to comply with tribunal’s
recommendation),
(b)
section 117 of the Employment Rights Act 1996 (failure to
reinstate etc.),
(c)
section 124(7) of the Equality Act 2010 (failure to comply with
15
tribunal’s recommendation), or
(d)
any other provision empowering the tribunal to award
compensation, or further compensation, for a failure to comply
(or to comply fully) with an order or recommendation of the
tribunal.
20
(7)
An employer’s liability to pay a penalty under this section is
discharged if 50% of the amount of the penalty is paid no later than 21
days after the day on which notice of the decision to impose the penalty
is sent to the employer.
(8)
In this section—
25
“claim”—
(a)
means anything that is referred to in the relevant
legislation as a claim, a complaint or a reference, other
than a reference made by virtue of section 122(2) or
128(2) of the Equality Act 2010 (reference by court of
30
question about a non-discrimination or equality rule
etc), and
(b)
also includes an application, under regulations made
under section 45 of the Employment Act 2002, for a
declaration that a person is a permanent employee;
35
“employer” has the same meaning as in Part 4A of the
Employment Rights Act 1996, and also—
(a)
in relation to an individual seeking to be employed by a
person as a worker, includes that person;
(b)
in relation to a right conferred by section 47A or 63A of
40
the Employment Rights Act 1996 (right to time off for
young person for study or training), includes the
principal within the meaning of section 63A(3) of that
Act;
(c)
in relation to a right conferred by the Agency Workers
45
Regulations 2010 (S.I. 2010/93), includes the hirer
within the meaning of those Regulations and (where the
worker is not actually employed by the temporary
work agency) the temporary work agency within that
meaning;
50

Enterprise and Regulatory Reform Bill
Part 2 — Employment
11

“financial award” means an award of a sum of money, but does
not including anything payable by virtue of section 13;
“worker” has the same meaning as in Part 4A of the Employment
Rights Act 1996, and also includes an individual seeking to be
employed by a person as a worker.
5
(9)
The Secretary of State may by order—
(a)
amend subsection (2) by substituting a different amount in
paragraph (a) or (b);
(b)
amend subsection (3), (4) or (7) by substituting a different
percentage;
10
(c)
amend this section so as to alter the meaning of “claim”.
(10)
The Secretary of State shall pay sums received under this section into the
Consolidated Fund.”
(2)
Schedule 3 (financial penalties: minor and consequential amendments) has
effect.
15
Miscellaneous
14
Disclosures not protected unless believed to be made in the public interest
In section 43B of the Employment Rights Act 1996 (disclosures qualifying for
protection), in subsection (1), after “in the reasonable belief of the worker
making the disclosure,” insert “is made in the public interest and”.
20
15
Indexation of amounts: timing and rounding
(1)
Section 34 of the Employment Relations Act 1999 (indexation of amounts, etc)
is amended as follows.
(2)
In subsection (2)—
(a)
omit “as soon as practicable”;
25
(b)
at the end insert “, with effect from the following 6th April”.
(3)
In subsection (3), for the words after “the Secretary of State shall” substitute
“round the result to the nearest whole pound, taking 50p as nearest to the next
whole pound above”.
16
Renaming of “compromise agreements”, “compromise contracts” and
30
“compromises”
(1)
In the following provisions, for “compromise” (in each place where it occurs)
substitute “settlement”—
(a)
section 288(2A) and (2B) of the Trade Union and Labour Relations
(Consolidation) Act 1992 (restriction on contracting out);
35
(b)
section 203(2)(f) and (3) of the Employment Rights Act 1996
(restrictions on contracting out);
(c)
section 49(3) and (4) of the National Minimum Wage Act 1998
(restrictions on contracting out);
(d)
section 58(4) and (5) of the Pensions Act 2008 (restrictions on
40
agreements to limit operation of Part 1).

Enterprise and Regulatory Reform Bill
Part 3 — The Competition and Markets Authority
12

(2)
In section 19A of the Employment Tribunals Act 1996 (conciliation: recovery of
sums payable under compromises)—
(a)
in subsections (1), (3), (4), (5) and (6), for “compromise” (in each place
where it occurs) substitute “settlement”;
(b)
in subsection (12)—
5
(i)
for “compromise” (in the first two places it occurs) substitute
“settlement”;
(ii)
omit “, or compromise,”;
(c)
in the heading, for “compromises” substitute “settlements”.
(3)
In section 28 of the Equality Act 2006 (legal assistance), in subsection (11), for
10
“compromise contract or agreement” substitute “settlement agreement”.
(4)
In section 144 of the Equality Act 2010 (contracting out), in subsection (4)(b), for
“compromise contract” substitute “settlement agreement”.
(5)
In section 147 of that Act (meaning of “qualifying compromise contract”), in
subsections (2) and (5) and in the heading, for “compromise contract”
15
substitute “settlement agreement”.
General
17
Transitional provision
(1)
Section 11 does not apply in relation to proceedings that are in the process of
being heard by the Employment Appeal Tribunal when that section comes into
20
force.
(2)
Section 13 does not apply in relation to any claim presented before the end of
the sixth month after the day on which this Act is passed (or before the
commencement of that section).
(3)
If an order under section 34 of the Employment Relations Act 1999 made before
25
the commencement of section 15 is expressed to come into force on a date that
is after that commencement—
(a)
the Secretary of State must revoke the order, and
(b)
the amendments made by section 15 apply in relation to the two retail
prices indices on which the order was based.
30
Part 3
The Competition and Markets Authority
18
The Competition and Markets Authority
(1)
There is to be a body corporate known as the Competition and Markets
Authority.
35
(2)
In this Part that body is referred to as “the CMA”.
(3)
The CMA must seek to promote competition, both within and outside the
United Kingdom, for the benefit of consumers.
(4)
Schedule 4 (which makes provision about the CMA) has effect.