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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(b)
the disclosure is made for the purpose of enabling or assisting
an officer of ACAS to carry out the functions of a conciliation
officer under any enactment,
(c)
the disclosure is made for the purpose of enabling or assisting—
(i)
a person appointed by ACAS under section 210(2), or
5
(ii)
an arbitrator or arbiter appointed by ACAS under any
enactment,

to carry out functions specified in the appointment,
(d)
the disclosure is made for the purposes of a criminal
investigation or criminal proceedings (whether or not within
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the United Kingdom),
(e)
the disclosure is made in order to comply with a court order,
(f)
the disclosure is made in a manner that ensures that no relevant
person to whom the information relates can be identified, or
(g)
the disclosure is made with the consent of each relevant person
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to whom the information relates.
(3)
Subsection (2) does not authorise the making of a disclosure which
contravenes the Data Protection Act 1998.
(4)
A person who discloses information in contravention of this section
commits an offence and is liable on summary conviction to a fine not
20
exceeding level 5 on the standard scale.
(5)
Proceedings in England and Wales for an offence under this section
may be instituted only with the consent of the Director of Public
Prosecutions.
(6)
For the purposes of this section information held by—
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(a)
a person appointed by ACAS under section 210(2) in connection
with functions specified in the appointment, or
(b)
an arbitrator or arbiter appointed by ACAS under any
enactment in connection with functions specified in the
appointment,
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is information that is held by ACAS in connection with the provision of
a service by ACAS.”
Procedure for deciding tribunal cases
11
Decisions by legal officers
(1)
In section 4 of the Employment Tribunals Act 1996 (composition of a tribunal),
35
after subsection (6C) insert—
“(6D)
A person appointed as a legal officer in accordance with regulations
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—
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(a)
the proceedings are of a description specified in an order under
this subsection made by the Secretary of State and the Lord
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
45
treated as made by an employment tribunal.”

Enterprise and Regulatory Reform Bill
Part 2 — Employment
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(2)
In section 41(2) of that Act (orders etc subject to affirmative resolution
procedure), after “section 4(4)” insert “or (6D)”.
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Composition of Employment Appeal Tribunal
(1)
The Employment Tribunals Act 1996 is amended as set out in subsections (2)
to (4).
5
(2)
In section 28 (composition of Appeal Tribunal), for subsections (2) to (4A)
substitute—
“(2)
Proceedings before the Appeal Tribunal are to be heard by a judge
alone.

This is subject to subsections (3) to (6) and to any provision made by
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virtue of section 30(2)(f) or (2A).
(3)
A judge may direct that proceedings are to be heard by a judge and
either two or four appointed members.
(4)
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.
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(5)
The Lord Chancellor may by order provide for proceedings of a
description specified in the order to be heard by a judge and either two
or four appointed members.
(6)
In proceedings heard by a judge and two or four appointed members,
there shall be an equal number of—
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(a)
employer-representative members, and
(b)
worker-representative members.
(7)
In this section—
“employer-representative members” means appointed members
whose knowledge or experience of industrial relations is as
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representatives of employers;
“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
30
for dealing with interlocutory matters), for the words from “otherwise” to the
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(5)”.
(5)
In consequence of the amendment made by subsection (2), omit paragraph 46
35
of Schedule 8 to the Tribunals, Courts and Enforcement Act 2007.
Unfair dismissal
13
Dismissal for political opinions: no qualifying period of employment
In section 108 of the Employment Rights Act 1996 (qualifying period of

Enterprise and Regulatory Reform Bill
Part 2 — Employment
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employment), after subsection (3) insert—
“(4)
Subsection (1) does not apply if the reason (or, if more than one, the
principal reason) for the dismissal is, or relates to, the employee’s
political opinions or affiliation.”
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Confidentiality of negotiations before termination of employment
5
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
proceedings on a complaint under section 111.

This is subject to subsections (3) to (5).
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(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
the employer and the employee.
(3)
Subsection (1) does not apply where, according to the complainant’s
15
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
dismissed.
(4)
In relation to anything said or done which in the tribunal’s opinion was
20
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
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.”
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15
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.
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(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
35
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.

Enterprise and Regulatory Reform Bill
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(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
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
5
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
and approved by a resolution of each House.
(9)
In this section “median annual earnings” means—
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(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
(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
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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
20
Employment Rights Act 1996 does not include anything specified by
virtue of section 15(2)(b)(ii) of the Enterprise and Regulatory Reform
Act 2013 (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
25
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 15(1) of the Enterprise and Regulatory
Reform Act 2013.”
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Financial penalties
16
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
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(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
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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).

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(2)
The tribunal shall have regard to an employer’s ability to pay—
(a)
in deciding whether to order the employer to pay a penalty
under this section;
(b)
(subject to subsections (3) to (7)) in deciding the amount of a
penalty.
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(3)
The amount of a penalty under this section shall be—
(a)
at least £100;
(b)
no more than £5,000.

This subsection does not apply where subsection (5) or (7) applies.
(4)
Subsection (5) applies where an employment tribunal—
10
(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.
(5)
In such a case, the amount of the penalty under this section shall be 50%
of the amount of the award, except that—
15
(a)
if the amount of the financial award is less than £200, the
amount of the penalty shall be £100;
(b)
if the amount of the financial award is more than £10,000, the
amount of the penalty shall be £5,000.
(6)
Subsection (7) applies, instead of subsection (5), where an employment
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tribunal—
(a)
considers together two or more claims involving different
workers but the same employer, and
(b)
orders the employer to pay a penalty under this section in
respect of any of those claims.
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(7)
In such a case—
(a)
the amount of the penalties in total shall be at least £100;
(b)
the amount of a penalty in respect of a particular claim shall
be—
(i)
no more than £5,000, and
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(ii)
where the tribunal makes a financial award against the
employer on the claim, no more than 50% of the amount
of the award.

But where the tribunal makes a financial award on any of the claims
and the amount awarded is less than £200 in total, the amount of the
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penalties in total shall be £100 (and paragraphs (a) and (b) shall not
apply).
(8)
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.
(9)
Subsection (5) or (7) does not require or permit an order under
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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
recommendation),
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(b)
section 117 of the Employment Rights Act 1996 (failure to
reinstate etc.),

Enterprise and Regulatory Reform Bill
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(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
compensation, or further compensation, for a failure to comply
(or to comply fully) with an order or recommendation of the
5
tribunal.
(10)
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.
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(11)
In 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
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128(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
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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—
(a)
in relation to an individual seeking to be employed by a
person as a worker, includes that person;
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(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
principal within the meaning of section 63A(3) of that
Act;
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(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
worker is not actually employed by the temporary
work agency) the temporary work agency within that
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meaning;
“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
40
employed by a person as a worker.
(12)
The Secretary of State may by order—
(a)
amend subsection (3), (5) or (7) by substituting a different
amount;
(b)
amend subsection (5), (7) or (10) by substituting a different
45
percentage;
(c)
amend this section so as to alter the meaning of “claim”.
(13)
The Secretary of State shall pay sums received under this section into
the Consolidated Fund.”

Enterprise and Regulatory Reform Bill
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(2)
Schedule 3 (financial penalties: minor and consequential amendments) has
effect.
Protected disclosures
17
Disclosures not protected unless believed to be made in the public interest
In section 43B of the Employment Rights Act 1996 (disclosures qualifying for
5
protection), in subsection (1), after “in the reasonable belief of the worker
making the disclosure,” insert “is made in the public interest and”.
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Power to reduce compensation where disclosure not made in good faith
(1)
Omit the words “in good faith” in the following provisions of Part 4A of the
Employment Rights Act 1996 (protected disclosures)—
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(a)
subsection (1) of section 43C (disclosure to employer or other
responsible person);
(b)
paragraph (b) of section 43E (disclosure to Minister of the Crown);
(c)
subsection (1)(a) of section 43F (disclosure to prescribed person).
(2)
In section 43G of that Act (disclosure in other cases), in subsection (1)—
15
(a)
omit paragraph (a);
(b)
in paragraph (b), for “he” substitute “the worker”.
(3)
In section 43H of that Act (disclosure of exceptionally serious failure), in
subsection (1)—
(a)
omit paragraph (a);
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(b)
in paragraph (b), for “he” substitute “the worker”.
(4)
In section 49 of that Act (remedies for detriment suffered in employment), after
subsection (6) insert—
“(6A)
Where—
(a)
the complaint is made under section 48(1A), and
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(b)
it appears to the tribunal that the protected disclosure was not
made in good faith,

the tribunal may, if it considers it just and equitable in all the
circumstances to do so, reduce any award it makes to the worker by no
more than 25%.”
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(5)
In section 123 of that Act (compensatory award for unfair dismissal), after
subsection (6) insert—
“(6A)
Where—
(a)
the reason (or principal reason) for the dismissal is that the
complainant made a protected disclosure, and
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(b)
it appears to the tribunal that the disclosure was not made in
good faith,

the tribunal may, if it considers it just and equitable in all the
circumstances to do so, reduce any award it makes to the complainant
by no more than 25%.”
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