Session 2012 - 13
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Enterprise and Regulatory Reform Bill


Enterprise and Regulatory Reform Bill
Part 2 — Employment

8

 

(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

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

5

and how many are to be worker-representative members.

(8)   

In this section—

“employer-representative members” means appointed members

whose knowledge or experience of industrial relations is as

representatives of employers;

10

“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

15

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.

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Unfair dismissal

12      

Confidentiality of negotiations before termination of employment

After section 111 of the Employment Rights Act 1996 insert—

“111A   

Confidentiality of negotiations before termination of employment

(1)   

Evidence of pre-termination negotiations is inadmissible in any

25

proceedings on a complaint under section 111.

   

This is subject to subsections (3) to (5).

(2)   

In subsection (1) “pre-termination negotiations” means any offer made

or discussions held, before the termination of the employment in

question, with a view to it being terminated on terms agreed between

30

the employer and the employee.

(3)   

Subsection (1) does not apply where, according to the complainant’s

case, the circumstances are such that a provision (whenever made)

contained in, or made under, this or any other Act requires the

complainant to be regarded for the purposes of this Part as unfairly

35

dismissed.

(4)   

In relation to anything said or done which in the tribunal’s opinion was

improper, or was connected with improper behaviour, subsection (1)

applies only to the extent that the tribunal considers just.

(5)   

Subsection (1) does not affect the admissibility, on any question as to

40

costs or expenses, of evidence relating to an offer made on the basis that

the right to refer to it on any such question is reserved.”

 
 

Enterprise and Regulatory Reform Bill
Part 2 — Employment

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13      

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

section.

5

(2)   

The limit as so varied may be—

(a)   

a specified amount, or

(b)   

the lower of—

(i)   

a specified amount, and

(ii)   

a specified number multiplied by a week’s pay of the individual

10

concerned.

(3)   

Different amounts may be specified by virtue of subsection (2)(a) or (b)(i) in

relation 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;

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(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)   

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

20

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

25

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

30

(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

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

35

etc), after subsection (4) insert—

“(4A)   

A reference in this section to a sum specified in section 124(1) of the

Employment Rights Act 1996 does not include anything specified by

virtue of section 13(2)(b)(ii) of the Enterprise and Regulatory Reform

Act 2013 (specified number multiplied by a week’s pay of the

40

individual concerned).

(4B)   

As regards a sum specified in section 124(1) of the Employment Rights

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

45

 
 

Enterprise and Regulatory Reform Bill
Part 2 — Employment

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been made under section 13(1) of the Enterprise and Regulatory

Reform Act 2013.”

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—

5

“Financial penalties

12A     

Financial 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

10

rights to which the claim relates, and

(b)   

is 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

15

employer on the claim).

(2)   

The 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

20

subsection.

(3)   

If 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,

25

   

the amount of that penalty shall be 50% of the amount of the award; but

this 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—

30

(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

35

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

40

(Consolidation) Act 1992 (failure to comply with tribunal’s

recommendation),

 
 

Enterprise and Regulatory Reform Bill
Part 2 — Employment

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(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

(d)   

any other provision empowering the tribunal to award

5

compensation, or further compensation, for a failure to comply

(or to comply fully) with an order or recommendation of the

tribunal.

(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

10

days after the day on which notice of the decision to impose the penalty

is sent to the employer.

(8)   

In this section—

“claim”—

(a)   

means anything that is referred to in the relevant

15

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

question about a non-discrimination or equality rule

etc), and

20

(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;

“employer” has the same meaning as in Part 4A of the

Employment Rights Act 1996, and also—

25

(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

the Employment Rights Act 1996 (right to time off for

young person for study or training), includes the

30

principal within the meaning of section 63A(3) of that

Act;

(c)   

in relation to a right conferred by the Agency Workers

Regulations 2010 (S.I. 2010/93), includes the hirer

within the meaning of those Regulations and (where the

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worker is not actually employed by the temporary

work agency) the temporary work agency within that

meaning;

“financial award” means an award of a sum of money, but does

not including anything payable by virtue of section 13;

40

“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.

(9)   

The Secretary of State may by order—

(a)   

amend subsection (2) by substituting a different amount in

45

paragraph (a) or (b);

(b)   

amend subsection (3), (4) or (7) by substituting a different

percentage;

(c)   

amend this section so as to alter the meaning of “claim”.

 
 

Enterprise and Regulatory Reform Bill
Part 2 — Employment

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(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.

Miscellaneous

5

15      

Protected disclosures

(1)   

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”.

(2)   

Section 43K of that Act (extension of meaning of “worker”) is amended as set

10

out in subsections (3) to (8).

(3)   

In subsection (1)(ba)—

(a)   

for “section 84 or 100 of” substitute “section 83(2), 84, 92, 100, 107,

115(4), 117 or 134 of, or Schedule 12 to,”;

(b)   

for “section 42 or 57 of” substitute “section 41(2)(b), 42, 50, 57, 64 or 92

15

of, or Schedule 7 to,”;

(c)   

omit the words after “the National Health Service (Wales) Act 2006”.

(4)   

In subsection (1)(bb), after “section 17J” insert “or 17Q”.

(5)   

In subsection (1)(c)—

(a)   

for the words before “in accordance with arrangements” substitute

20

“works or worked as a person providing services”;

(b)   

in sub-paragraph (ii), after “section” insert “2C, 17AA, 17C,”.

(6)   

Omit subsection (1)(ca) and the preceding “or”.

(7)   

Omit subsection (2)(ba).

(8)   

After subsection (3) insert—

25

“(4)   

The Secretary of State may by order make amendments to this section

as to what individuals count as “workers” for the purposes of this Part

(despite not being within the definition in section 230(3)).

(5)   

An order under subsection (4) may not make an amendment that has

the effect of removing a category of individual unless the Secretary of

30

State is satisfied that there are no longer any individuals in that

category.”

(9)   

In section 236(3) of that Act (orders etc subject to affirmative resolution

procedure), after “shall be made under section” insert “43K(4),”.”

(10)   

In consequence of the amendments made by subsections (6) and (7), omit

35

paragraph 7(a)(ii) and (b) of the Schedule to the Smoking, Health and Social

Care (Scotland) Act 2005 (Consequential Modifications) (England, Wales and

Northern Ireland) Order 2006 (S.I. 2006/1056).

(11)   

Until the coming into force of the repeal (made by Schedule 3 to the Smoking,

Health and Social Care (Scotland) Act 2005 (asp 13)) of sections 27 to 28 of the

40

National Health Service (Scotland) Act 1978 (“the 1978 Act”), section

 
 

Enterprise and Regulatory Reform Bill
Part 2 — Employment

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43K(1)(c)(ii) of the Employment Rights Act 1996 has effect as if it included a

reference to section 27A of the 1978 Act.

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)

5

(deposit orders), in paragraph (a)—

(a)   

omit “, 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

10

(ii)   

pursuing any specified allegations or

arguments”.

(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—

15

“(4)   

Subsection (3) does not require the regulations to include

provision 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.”

20

(4)   

In section 42 (interpretation), in subsection (1), after the definition of

“employment tribunal procedure regulations” insert—

““representative” shall be construed in accordance with section

6(1) (in Part 1) or section 29(1) (in Part 2),”.

17      

Indexation of amounts: timing and rounding

25

(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”;

(b)   

at the end insert “, with effect from the following 6th April”.

30

(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”.

18      

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

“compromises”

35

(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);

(b)   

section 203(2)(f) and (3) of the Employment Rights Act 1996

40

(restrictions on contracting out);

 
 

Enterprise and Regulatory Reform Bill
Part 2 — Employment

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(c)   

section 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

5

where it occurs) substitute “settlement”;

(b)   

in subsection (12)—

(i)   

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

“settlement”;

(ii)   

omit “, or compromise,”;

10

(c)   

in 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”;

15

(b)   

after 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.”

20

(4)   

In 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

25

subsections (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

30

being 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

35

the 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—

40

(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.

 
 

 
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Revised 4 February 2013