Enterprise and Regulatory Reform Bill (HC Bill 7)

Enterprise and Regulatory Reform BillPage 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) 5Two or more claims in respect of the same act and the same worker
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) 10section 140(3) of the Trade Union and Labour Relations
(Consolidation) Act 1992 (failure to comply with tribunal’s
recommendation),

(b) section 117 of the Employment Rights Act 1996 (failure to
reinstate etc.),

(c) 15section 124(7) of the Equality Act 2010 (failure to comply with
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
20tribunal.

(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) 25In this section—

  • “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
    30128(2) of the Equality Act 2010 (reference by court of
    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
    35declaration that a person is a permanent employee;

  • “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)

    40in relation to a right conferred by section 47A or 63A of
    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)

    45in relation to a right conferred by the Agency Workers
    Regulations 2010 (S.I. 2010/93S.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
    50meaning;

  • Enterprise and Regulatory Reform BillPage 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
    5employed by a person as a worker.

(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
10percentage;

(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
15effect.

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
20making the disclosure,” insert “is made in the public interest and”.

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) 25omit “as soon as practicable”;

(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 30Renaming of “compromise agreements”, “compromise contracts” and
“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
35(Consolidation) Act 1992 (restriction on contracting out);

(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) 40section 58(4) and (5) of the Pensions Act 2008 (restrictions on
agreements to limit operation of Part 1).

Enterprise and Regulatory Reform BillPage 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) 5in subsection (12)—

(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) 10In section 28 of the Equality Act 2006 (legal assistance), in subsection (11), for
“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
15subsections (2) and (5) and in the heading, for “compromise contract”
substitute “settlement agreement”.

General

17 Transitional provision

(1) Section 11 does not apply in relation to proceedings that are in the process of
20being heard by the Employment Appeal Tribunal when that section comes into
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) 25If an order under section 34 of the Employment Relations Act 1999 made before
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
30prices indices on which the order was based.

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
35Authority.

(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.

Enterprise and Regulatory Reform BillPage 13

19 Abolition of the Competition Commission and the OFT

(1) The Competition Commission is abolished.

(2) The Office of Fair Trading is abolished.

(3) Schedule 5 (which amends the Competition Act 1998 and the Enterprise Act
52002 to make provision for the transfer of functions from the Competition
Commission and the Office of Fair Trading to the CMA and to make other
minor and consequential amendments) has effect.

(4) Schedule 6 (which amends other enactments to make provision for the transfer
of certain functions from the Competition Commission and the Office of Fair
10Trading to the CMA) has effect.

20 Transfer schemes

(1) The Secretary of State may make one or more transfer schemes in connection
with—

(a) the establishment of the CMA under this Act,

(b) 15the transfer of functions under or by virtue of this Act from the
Competition Commission or the Office of Fair Trading to the CMA, or

(c) the abolition of that Commission or that Office under this Act.

(2) A transfer scheme is a scheme for the transfer of property, rights and liabilities
of the Competition Commission or the Office of Fair Trading to—

(a) 20the CMA, or

(b) a Minister of the Crown (as defined by section 8 of the Ministers of the
Crown Act 1975).

(3) The things that may be transferred under a transfer scheme include—

(a) property, rights and liabilities that could not otherwise be transferred;

(b) 25property acquired, and rights and liabilities arising, after the making of
the scheme.

(4) A transfer scheme may make consequential, supplementary, incidental or
transitional provision and may in particular—

(a) create rights, or impose liabilities, in relation to property or rights
30transferred;

(b) make provision about the continuing effect of things done by the
transferor in respect of anything transferred;

(c) make provision about the continuation of things (including legal
proceedings) in the process of being done by, on behalf of, or in relation
35to the transferor in respect of anything transferred;

(d) make provision for references to the transferor in an instrument or
other document in respect of anything transferred to be treated as
references to the transferee;

(e) make provision for the shared ownership or use of property;

(f) 40make provision that is the same as or similar to the TUPE regulations.

(5) A transfer scheme may provide-

(a) for the scheme to be modified by agreement after it comes into effect;

(b) for modifications to have effect from the date when the scheme first
came into effect.

Enterprise and Regulatory Reform BillPage 14

(6) For the purposes of this section—

(a) an individual who holds employment in the civil service is to be treated
as employed by virtue of a contract of employment, and

(b) the terms of the individual’s employment in the civil service are to be
5regarded as constituting the terms of the contract of employment.

(7) In this section—

  • “civil service” means the civil service of the State;

  • TUPE regulations” means the Transfer of Undertakings (Protection of
    Employment) Regulations 2006 (SI 2006/246SI 2006/246);

  • 10references to rights and liabilities include rights and liabilities relating to
    a contract of employment;

  • references to the transfer of property include references to the grant of a
    lease.

Part 4 15Competition Reform

CHAPTER 1 Mergers

Investigation powers

21 Investigation powers: mergers

(1) Section 109 of the Enterprise Act 2002 (“the 2002 Act”) (investigation powers in
20connection with attendance of witnesses etc.) is amended as follows.

(2) Before subsection (1) insert—

(A1) For the purposes of this section, the permitted purposes are the
following—

(a) assisting the CMA in carrying out any functions, including
25enforcement functions, exercisable by it under or by virtue of
this Part in connection with a matter that is or has been the
subject of a reference or possible reference under section 22 or
33;

(b) assisting the CMA or the Secretary of State in carrying out any
30functions, including enforcement functions, of the CMA or (as
the case may be) the Secretary of State under or by virtue of this
Part in connection with a matter that is or has been the subject
of a reference or possible reference under section 45 or 62.

(3) In subsection (1), for the words from the beginning to “under this Part,”
35substitute “The CMA may, for a permitted purpose,”.

(4) In subsection (2), for the words from the beginning to “under this Part,”
substitute “The CMA may, for a permitted purpose,”.

(5) In subsection (3), for the words from the beginning to “under this Part,”
substitute “The CMA may, for a permitted purpose,”.

Enterprise and Regulatory Reform BillPage 15

(6) In subsection (4), after “shall” insert

(a) specify the permitted purpose for which the notice is given,
including the function or functions in question; and

(b).

(7) 5In subsection (5), for the words from the beginning to “under this Part,”
substitute “The CMA, or any person nominated by it for the purpose, may for
a permitted purpose”.

(8) In subsection (6), for the words from “for the purpose of” to “under this Part”
substitute “for a permitted purpose”.

(9) 10After subsection (8) insert—

(8A) In subsection (A1), “enforcement functions” means—

(a) in relation to the CMA—

(i) functions conferred by virtue of section 87 on the CMA
by enforcement orders;

(ii) 15functions of the CMA in relation to the variation,
supersession or release of enforcement undertakings or
the variation or revocation of enforcement orders;

(iii) functions of the CMA under or by virtue of section 75,
76, 83 or 92 in relation to enforcement undertakings or
20enforcement orders;

(b) in relation to the Secretary of State—

(i) functions conferred by virtue of section 87 on the
Secretary of State by enforcement orders;

(ii) functions of the Secretary of State in relation to the
25variation, supersession or release of enforcement
undertakings or the variation or revocation of
enforcement orders;

(iii) functions of the Secretary of State under or by virtue of
paragraph 5, 6 or 10 of Schedule 7 in relation to
30enforcement undertakings or enforcement orders.

(10) In section 110 (enforcement of powers under section 109: general), omit
subsection (4).

(11) After section 110 insert—

110A Restriction on powers to impose penalties under section 110

(1) 35No penalty shall be imposed by virtue of section 110(1) or (3) if more
than 4 weeks have passed since the day which is the relevant day in the
case in question; but this subsection shall not apply in relation to any
variation or substitution of the penalty which is permitted by virtue of
this Part.

(2) 40In the following provisions of this section, “the section 109 power”
means the power under section 109 to which the failure or (as the case
may be) the obstruction or delay in question relates.

(3) Where the section 109 power is exercised in connection with an
enforcement function (within the meaning of that section), the relevant
45day is the day when the enforcement undertaking concerned is
superseded or released or (as the case may be) the enforcement order
concerned is revoked.

Enterprise and Regulatory Reform BillPage 16

(4) Except where subsection (3) applies, the relevant day is the day
determined in accordance with the following provisions of this section.

(5) Where the section 109 power is exercised for the purpose mentioned in
section 109(A1)(a) in connection with a matter that is the subject of a
5possible reference under section 22 or 33, the relevant day is the day
when the CMA finally decides whether to make the reference.

(6) Where the section 109 power is exercised for the purpose mentioned in
section 109(A1)(a) in connection with a matter that is the subject of a
reference under section 22 or 33, the relevant day is the day when the
10reference is finally determined (see section 79).

(7) Where the section 109 power is exercised for the purpose mentioned in
section 109(A1)(b) in connection with a matter that is the subject of a
possible reference under section 45 or 62, the relevant day is the day
when the Secretary of State finally decides whether to make the
15reference.

(8) Where the section 109 power is exercised for the purpose mentioned in
section 109(A1)(b) in connection with a matter that is the subject of a
reference under section 45 or 62, the relevant day is the day when the
reference is finally determined.

110B 20 Section 110A: supplementary provision

(1) For the purpose of section 110A(5), the CMA finally decides whether to
make a reference under section 22 or 33 if—

(a) the CMA decides that the duty to make such a reference applies;

(b) the CMA accepts an undertaking under section 73;

(c) 25the CMA decides not to make such a reference (otherwise than
because it has accepted an undertaking under section 73);

(d) the initial period for the purposes of section 34ZA expires
without the CMA having complied with the duty under
subsection (1) of that section;

(e) 30the preliminary assessment period for the purposes of section
34A expires without the CMA having complied with the duty
under subsection (1) of that section;

(f) the period permitted by section 73A for the CMA to make a
decision required by subsection (2)(a) or (3) of that section
35expires without the CMA having made the decision.

(2) For the purpose of section 110A(5), the time when the CMA finally
decides whether to make a reference under section 22 or 33 is—

(a) in a case falling within subsection (1)(a), the making of the
decision that the duty to make such a reference applies;

(b) 40in a case falling within subsection (1)(b), the acceptance of the
undertaking;

(c) in a case falling within subsection (1)(c), the making of the
decision not to make the reference;

(d) in a case falling within subsection (1)(d), the expiry of the initial
45period;

(e) in a case falling within subsection (1)(e), the expiry of the
preliminary assessment period;

Enterprise and Regulatory Reform BillPage 17

(f) in a case falling within subsection (1)(f), the expiry of the period
in question.

(3) For the purpose of section 110A(7), the Secretary of State finally decides
whether to make a reference under section 45 or 62 if—

(a) 5the Secretary of State makes such a reference;

(b) the Secretary of State accepts an undertaking under paragraph
3 of Schedule 7;

(c) the Secretary of State decides not to make such a reference
(otherwise than because of the acceptance of an undertaking
10under paragraph 3 of Schedule 7);

(d) the preliminary assessment period for the purposes of section
46A expires without the CMA having complied with the duty
under subsection (1) of that section.

(4) For the purpose of section 110A(7), the time when the Secretary of State
15finally decides whether to make a reference under section 45 or 62 is—

(a) in a case falling within subsection (3)(a), the making of the
reference;

(b) in a case falling within subsection (3)(b), the acceptance of the
undertaking;

(c) 20in a case falling within subsection (3)(c), the making of the
decision not to make the reference;

(d) in a case falling within subsection (3)(d), the expiry of the
preliminary assessment period.

(5) Paragraph 7(8) to (10) of Schedule 7 applies for deciding if and when a
25reference under section 45(2) or (3) or 62(2) is finally determined for the
purpose of section 110A(8) as it applies for deciding those questions for
the purpose of paragraph 7 of Schedule 7.

(6) Paragraph 8(7) to (9) of Schedule 7 applies for deciding if and when a
reference under section 45(4) or (5) or 62(3) is finally determined for the
30purpose of section 110A(8) as it applies for deciding those questions for
the purpose of the definition of “relevant period” in paragraph 8(6) of
that Schedule.

(12) In section 111 (penalties), in subsection (5)(b)—

(a) in sub-paragraph (i), omit “or (as the case may be) the obstruction or
35delay is removed”, and

(b) in sub-paragraph (ii), for the words from “the day” to the end of the
sub-paragraph substitute “the day which is the relevant day in the case
in question for the purposes of section 110A”.

Interim measures

22 40Interim measures: pre-emptive action: mergers

(1) Omit section 71 of the 2002 Act (initial undertakings: completed mergers).

(2) Section 72 of that Act (initial enforcement orders: completed mergers) is
amended as follows.

Enterprise and Regulatory Reform BillPage 18

(3) For subsection (1) substitute—

(1) Subsection (2) applies where—

(a) the CMA is considering whether to make a reference under
section 22 or 33; and

(b) 5the CMA has reasonable grounds for suspecting that it is or may
be the case that two or more enterprises have ceased to be
distinct or that arrangements are in progress or in
contemplation which, if carried into effect, will result in two or
more enterprises ceasing to be distinct.

(4) 10Omit subsection (3).

(5) Before subsection (4) insert—

(3A) Subsection (3B) applies where—

(a) subsection (1)(a) and (b) applies; and

(b) the CMA also has reasonable grounds for suspecting that pre-
15emptive action has or may have been taken.

(3B) The CMA may by order, for the purpose of restoring the position to
what it would have been had the pre-emptive action not been taken or
otherwise for the purpose of mitigating its effects—

(a) do anything mentioned in subsection (2)(b) to (d);

(b) 20impose such other obligations, prohibitions or restrictions as it
considers appropriate for that purpose.

(6) After subsection (3B) insert—

(3C) A person may, with the consent of the CMA, take action or action of a
particular description where the action would otherwise constitute a
25contravention of an order under this section.

(7) In subsection (6), in each of paragraphs (a) and (d), after “section 22” insert “or
33”.

(8) After subsection (7) insert—

(8) In this section “pre-emptive action” means action which might
30prejudice the reference concerned or impede the taking of any action
under this Part which may be justified by the CMA’s decisions on the
reference.

(9) In the heading for “completed mergers” substitute “completed or anticipated
mergers”.

(10) 35Schedule 7 (which makes further provision about interim measures under Part
3 of the 2002 Act) has effect.

23 Interim measures: financial penalties: mergers

(1) After section 94 of the 2002 Act (rights to enforce undertakings and orders
under Part 3) insert—

94A 40 Interim undertakings and orders under this Part: penalties

(1) Where the appropriate authority considers that a person has, without
reasonable excuse, failed to comply with an interim measure, it may
impose a penalty of such fixed amount as it considers appropriate.

Enterprise and Regulatory Reform BillPage 19

(2) A penalty imposed under subsection (1) shall not exceed 5% of the total
value of the turnover (both in and outside the United Kingdom) of the
enterprises owned or controlled by the person on whom it is imposed.

(3) For the purposes of subsection (2), the Secretary of State may by order
5make provision for determining—

(a) when an enterprise is to be treated as controlled by a person;
and

(b) the turnover (both in and outside the United Kingdom) of an
enterprise.

(a)(a)10when an enterprise is to be treated as controlled by a person;
and

(b) the turnover (both in and outside the United Kingdom) of an
enterprise.

(4) An order under subsection (3)(b) may, in particular, make provision as
15to—

(a) the amounts which are, or which are not, to be treated as
comprising an enterprise’s turnover;

(b) the date or dates by reference to which an enterprise’s turnover
is to be determined.

(5) 20An order under subsection (3) may, in particular, make provision
enabling the appropriate authority to determine matters of a
description specified in the order (including any of the matters
mentioned in paragraphs (a) and (b) of subsection (4)).

(6) The Secretary of State may by order amend subsection (2) so as to alter
25the percentage for the time being mentioned there to any percentage
not exceeding 5%.

(7) Sections 112 to 115 apply in relation to a penalty imposed under subsection (1)
as they apply in relation to a penalty of a fixed amount imposed under section
110(1), with the modification that any reference in those provisions to the
30CMA is to be read as a reference to the person who imposed the penalty under
this section.

(8) In this section—

  • “interim measure” means—

    (a)

    an undertaking under section 80, or

    (b)

    35an order under section 72 or 81 or paragraph 2 of
    Schedule 7;

  • “appropriate authority” means—

  • (a)

    in relation to an interim measure which is an order made
    by the Secretary of State under paragraph 2 of Schedule
    407, the Secretary of State;

    (b)

    in relation to any other interim measure, the CMA.

94B Statement of policy in relation to powers under sections 94 and 94A

(1) The CMA shall prepare and publish a statement of policy in relation to
the use of its powers under—

(a) 45section 94, insofar as they relate to interim measures; and

(b) section 94A.

(2) The CMA shall, in particular, include a statement about the
considerations relevant to the determination of the amount of any
penalty imposed under section 94A.