Enterprise and Regulatory Reform Bill

Session 2012 - 13
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Enterprise and Regulatory Reform Bill

Enterprise and Regulatory Reform Bill
Part 2 — Employment
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(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.
20
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
9

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;
15
(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
10

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
35
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.