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Enterprise and Regulatory Reform BillPage 10

etc) so as to vary the limit imposed for the time being by subsection (1) of that
section.

(2) The limit as so varied may be—

(a) a specified amount, or

(b) 5the lower of—

(i) a specified amount, and

(ii) a specified number multiplied by a week’s pay of the individual
concerned.

(3) Different amounts may be specified by virtue of subsection (2)(a) or (b)(i) in
10relation to employers of different descriptions.

(4) An amount specified by virtue of subsection (2)(a) or (b)(i)—

(a) may not be less than median annual earnings;

(b) may not be more than three times median annual earnings.

(5) A number specified by virtue of subsection (2)(b)(ii) may not be less than 52.

(6) 15An 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
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
20dismissal 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
and approved by a resolution of each House.

(9) In this section “median annual earnings” means—

(a) 25the 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

(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
30estimate 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
35Employment Rights Act 1996 does not include anything specified by
virtue of section 13(2)(b)(ii) 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
40Act 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 13(1) of the Enterprise and Regulatory
Reform Act 2012.

Enterprise and Regulatory Reform BillPage 11

Financial penalties

14 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 5Financial penalties

(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) 10is of the opinion that the breach has one or more aggravating
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) 15The amount of a penalty under this section shall be—

(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) 20If an employment tribunal—

(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
25this does not apply where subsection (4) applies.

(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—

(a) makes a financial award against the employer, and

(b) 30also 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
shall be treated as a single claim for the purposes of this section.

(6) 35Subsection (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
(Consolidation) Act 1992 (failure to comply with tribunal’s
40recommendation),

(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
tribunal’s recommendation), or

Enterprise and Regulatory Reform BillPage 12

(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.

(7) 5An 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—

(9) 40The 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;

(c) 45amend 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.

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Miscellaneous

15 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
5making the disclosure,” insert “is made in the public interest and”.

16 Tribunal procedure: miscellaneous

(1) The Employment Tribunals Act 1996 is amended as follows.

(2) In section 9 (pre-hearing reviews and preliminary matters), in subsection (2)
(deposit orders), in paragraph (a)—

(a) 10omit “, if he wishes to continue to participate in those proceedings,”;

(b) after “an amount not exceeding £1,000” insert as a condition of—

(i) continuing to participate in those proceedings,
or

(ii) pursuing any specified allegations or
15arguments.

(3) In section 13A (payments in respect of preparation time)—

(a) in subsection (3), after “shall also” insert “, subject to subsection (4),”;

(b) after subsection (3) insert—

(4) Subsection (3) does not require the regulations to include
20provision to prevent an employment tribunal from making—

(a) an order of the kind mentioned in subsection (1), and

(b) an award of the kind mentioned in section 13(1)(a) that
is limited to witnesses’ expenses.

(4) In section 42 (interpretation), in subsection (1), after the definition of
25“employment tribunal procedure regulations” insert—

17 Indexation of amounts: timing and rounding

(1) Section 34 of the Employment Relations Act 1999 (indexation of amounts, etc)
30is amended as follows.

(2) In subsection (2)—

(a) omit “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
35“round the result to the nearest whole pound, taking 50p as nearest to the next
whole pound above”.

18 Renaming of “compromise agreements”, “compromise contracts” and
“compromises”

(1) In the following provisions, for “compromise” (in each place where it occurs)
40substitute “settlement”—

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(a) section 288(2A) and (2B) of the Trade Union and Labour Relations
(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) 5section 58(4) and (5) of the Pensions Act 2008 (restrictions on
agreements to limit operation of Part 1).

(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
10where it occurs) substitute “settlement”;

(b) in subsection (12)—

(i) for “compromise” (in the first two places it occurs) substitute
“settlement”;

(ii) omit “, or compromise,”;

(c) 15in the heading, for “compromises” substitute “settlements”.

(3) In section 49 of the National Minimum Wage Act 1998 (restrictions on
contracting out)—

(a) in subsections (3) and (4), for “compromise” (in each place where it
occurs) substitute “settlement”;

(b) 20after subsection (8) insert—

(8A) In the application of this section in relation to Northern Ireland,
subsections (3) and (4) above shall have effect as if for
“settlement agreements” (in each place) there were substituted
“compromise agreements.

(4) 25In section 28 of the Equality Act 2006 (legal assistance), in subsection (11), for
“compromise contract or agreement” substitute “settlement agreement”.

(5) In section 144 of the Equality Act 2010 (contracting out), in subsection (4)(b), for
“compromise contract” substitute “settlement agreement”.

(6) In section 147 of that Act (meaning of “qualifying compromise contract”), in
30subsections (2) and (5) and in the heading, for “compromise contract”
substitute “settlement agreement”.

General

19 Transitional provision

(1) Section 11 does not apply in relation to proceedings that are in the process of
35being heard by the Employment Appeal Tribunal when that section comes into
force.

(2) Section 12 does not apply to any offer made or discussions held before the
commencement of that section.

(3) Section 14 does not apply in relation to any claim presented before the end of
40the sixth month after the day on which this Act is passed (or before the
commencement of that section).

(4) If an order under section 34 of the Employment Relations Act 1999 made before
the commencement of section 17 is expressed to come into force on a date that
is after that commencement—

Enterprise and Regulatory Reform BillPage 15

(a) the Secretary of State must revoke the order, and

(b) the amendments made by section 17 apply in relation to the two retail
prices indices on which the order was based.

Part 3 5The Competition and Markets Authority

20 The Competition and Markets Authority

(1) There is to be a body corporate known as the Competition and Markets
Authority.

(2) In this Part that body is referred to as “the CMA”.

(3) 10The 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.

21 Abolition of the Competition Commission and the OFT

(1) The Competition Commission is abolished.

(2) 15The Office of Fair Trading is abolished.

(3) Schedule 5 (which amends the Competition Act 1998 and the Enterprise Act
2002 to make provision for the transfer of certain 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) 20Schedule 6 (which amends other enactments to make provision for the transfer
of certain functions from the Competition Commission and the Office of Fair
Trading to the CMA) has effect.

22 Transfer schemes

(1) The Secretary of State may make one or more transfer schemes in connection
25with—

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

(b) the 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) 30A 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) the CMA, or

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

(3) 35The things that may be transferred under a transfer scheme include—

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

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

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(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
transferred;

(b) 5make 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
to the transferor in respect of anything transferred;

(d) 10make 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) make provision that is the same as or similar to the TUPE regulations.

(5) 15A 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.

(6) For the purposes of this section—

(a) 20an 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
regarded as constituting the terms of the contract of employment.

(7) In this section—

Part 4 Competition Reform

CHAPTER 1 Mergers

35Investigation powers

23 Investigation powers: mergers

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

(2) Before subsection (1) insert—

(A1) 40For the purposes of this section, the permitted purposes are the
following—

Enterprise and Regulatory Reform BillPage 17

(a) assisting the CMA in carrying out any functions, including
enforcement 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
533;

(b) assisting the CMA or the Secretary of State in carrying out any
functions, 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
10of a reference or possible reference under section 45 or 62.

(3) In subsection (1), for the words from the beginning to “under this Part,”
substitute “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) 15In subsection (3), for the words from the beginning to “under this Part,”
substitute “The CMA may, for a permitted purpose,”.

(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) In 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”
25substitute “for a permitted purpose”.

(9) After 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
30by enforcement orders;

(ii) functions 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,
3576, 83 or 92 in relation to enforcement undertakings or
enforcement 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) 40functions of the Secretary of State in relation to the
variation, 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
45paragraph 5, 6 or 10 of Schedule 7 in relation to
enforcement undertakings or enforcement orders.

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(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) 5No 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) 10In 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
15day is the day when the enforcement undertaking concerned is
superseded or released or (as the case may be) the enforcement order
concerned is revoked.

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

(5) 20Where 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
possible 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
25section 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
reference 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
30possible reference under section 45 or 62, the relevant day is the day
when the Secretary of State finally decides whether to make the
reference.

(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
35reference under section 45 or 62, the relevant day is the day when the
reference is finally determined.

110B 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) 40the CMA decides that the duty to make such a reference applies;

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

(c) the 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
45without the CMA having complied with the duty under
subsection (1) of that section;

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(e) the preliminary assessment period for the purposes of section
34A expires without the CMA having complied with the duty
under subsection (2) of that section;

(f) the period permitted by section 73A for the CMA to make a
5decision required by subsection (2)(a) or (3) of that section
expires 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
10decision that the duty to make such a reference applies;

(b) in 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) 15in a case falling within subsection (1)(d), the expiry of the initial
period;

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

(f) in a case falling within subsection (1)(f), the expiry of the period
20in 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) the Secretary of State makes such a reference;

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

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

(d) the preliminary assessment period for the purposes of section
3046A expires without the CMA having complied with the duty
under subsection (2) of that section.

(4) For the purpose of section 110A(7), the time when the Secretary of State
finally 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
35reference;

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

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

(d) 40in 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
reference 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
45the 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
purpose of section 110A(8) as it applies for deciding those questions for

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