Employment Bill completes its passage through parliament

In November 2008, the Employment Bill completed its final legislative stages to become the Employment Act 2008. The new legislation repeals existing statutory dispute resolution provisions, replacing them with measures to encourage the early and informal resolution of employment disputes. It also strengthens the enforcement framework for the national minimum wage and amends the law on trade union membership to comply with a ruling of the European Court of Human Rights.

On 13 November 2008, having completed its passage through parliament, the Employment Bill (UK0712019I) received Royal Assent to become law as the Employment Act 2008. The act introduces a range of employment law reforms, including those outlined below. The bulk of the new provisions are expected to be brought into force in April 2009.

Dispute resolution

Reflecting the findings of a 2007 review of workplace dispute resolution (UK0701059I), the act replaces the statutory discipline and grievance procedures introduced in 2004 (UK0408102F) under the Employment Act 2002. It also repeals provisions in the Employment Relations Act 1996 relating to procedural unfairness in dismissal cases.

In their place, the act seeks to promote compliance with a statutory code of practice on procedures for the resolution of disputes. This will be a revised version of the existing code of practice on disciplinary and grievance procedures produced by the Advisory, Conciliation and Arbitration Service (Acas). Employment tribunals will be able to adjust awards by up to 25% where the parties have unreasonably failed to comply with the code.

The act also introduces changes to the law governing conciliation by Acas. These include:

  • enabling Acas to prioritise cases where demand for conciliation exceeds the resources available;
  • relieving Acas of the obligation to offer conciliation in pre-tribunal disputes where there is no prospect of success;
  • extending Acas’s duty to conciliate in tribunal cases until the tribunal delivers judgement.

National minimum wage

The act seeks to clarify and strengthen the enforcement framework for the national minimum wage (NMW) (UK9904196F) by:

  • introducing a new method of calculating arrears;
  • replacing enforcement and penalty notices with a single notice of underpayment, which will include a civil penalty against employers who have not complied with NMW requirements;
  • increasing the civil enforcement powers available to officers enforcing the NMW – namely officers of HM Revenue and Customs;
  • making offences under the National Minimum Wage Act 1998 triable in the Crown Court or the Magistrates’ Court;
  • increasing the criminal investigative powers available to officers enforcing the NMW.

Employment agencies

The act makes a number of amendments to the employment agency standards enforcement regime. These include:

  • making offences under the Employment Agencies Act 1973 triable in the Crown Court or the Magistrates’ Court;
  • conferring additional inspection powers on the Employment Agency Standards Inspectorate.

The act also allows officers enforcing the NMW and officers enforcing employment agency standards to share information for the purpose of their respective enforcement functions.

Exclusion or expulsion from trade union membership

The act amends existing provisions in the Trade Union and Labour Relations (Consolidation) Act 1992 to allow a trade union to expel or exclude a person on the basis of their membership or former membership of a political party. This was previously unlawful under the 1992 Act. However, decisions to exclude or expel members or potential members must comply with trade union rules, be taken fairly and not cause the individual to lose their livelihood or suffer exceptional hardship.

The change follows a ruling of the European Court of Human Rights (ECHR) in February 2007 in the case of Aslef versus UK (EU0705029I). The train drivers’ union, the Associated Society of Locomotive Engineers and Firemen (Aslef), had expelled a member for belonging to the far-right British National Party. This move had been found to be unlawful by an employment tribunal but Aslef complained to the ECHR. The court ruled that, in being prevented from expelling a member on grounds of political party membership, the union’s right of association under the European Convention for the Protection of Human Rights and Fundamental Freedoms has been infringed.

Employer and trade union views

The government’s move to repeal the Employment Act 2002’s statutory dispute resolution procedures was welcomed by employer groups, including the Confederation of British Industry (CBI), on the grounds that they had driven a major growth in formality and in the involvement of third parties.

The Trades Union Congress (TUC) took the view that the procedures were excessively complicated and designed primarily to reduce the number of tribunal claims rather than encourage effective dispute resolution. However, while welcoming many of the provisions in the Employment Bill, the TUC expressed concern over the inclusion in the legislation of conditions that must be met if exclusion or expulsion of individuals from a trade union due to membership of a political party is to be lawful.

Mark Hall, IRRU, University of Warwick

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