Resolving disputes and enforcement

UK employment law reforms on the horizon

Extension to Employment Tribunal time limits

The government has indicated that it may extend the time limit for bringing claims to Employment Tribunals.

Implementation Status (November 2024)

  • Added to the Employment Rights Bill by amendment before it is finalised.
     
Action

  • Factor in any increase in time limits to internal "risk" management processes and strategic considerations when dealing with workplace issues and potential claims. Any increase will also impact on disclosure requirements on any corporate disposals or acquisitions.

  • Ensure the employer's position is protected so far as possible in respect of any future litigation, for example by ensuring a paper trail is in place, securing cooperation from any potential witnesses who may leave the organisation prior to a hearing (or ensuring that their recollections are accurately recorded).  

In detail
  • In its Make Work Pay paper, the government indicated that it would seek to increase the time limit for individuals to bring an Employment Tribunal claim from three to six months. 
Impact
  • Extending the time limit would bring other claims in line with the six month time limit which currently applies on claims for statutory redundancy and equal pay.
     
  • While the increase would bring more uncertainty for employers, it may provide more opportunity for issues to be resolved internally or settled, without the stakes being raised by an individual protecting their position by triggering the Employment Tribunal process.                                                                                                                                                            

Raising collective grievances

The government will consult with Acas on enabling employees to collectively raise grievances about conduct at work.

Implementation Status (November 2024)

  • Subject to a separate consultation.
  • Identified in the Next Steps paper as a reform for "longer term delivery". 
     
Action
  • Employers should anticipate more employees feeling enable to raise issues in a collective context. Careful management of the potential employee relations and litigation risks will be needed when managing such grievances, as well as identifying where they fall within the scope of whistleblowing protection.
     
  • Grievance processes will need to be updated to set out clearly how such grievances will be managed, alongside other related policies.
     
  • A strong staff forum may assist in providing an alternative avenue for any issues to be raised and avert the need for a more formal and potentially antagonistic grievance process. 
In detail

  • We are awaiting further details.

Impact
  • Collective grievances may in some instances may flag issues which have a wider organisational impact, enabling employers to deal with issues at an early stage before they escalate.                                                                                                                                                   

A new Fair Work Agency

The government will establish a Fair Work Agency which will deal with enforcement of the National Minimum Wage Statutory Sick Pay, holiday pay, Employment Tribunal penalties and some aspects of the Modern Slavery Act.  

Implementation Status (November 2024)

  • Part of the Employment Rights Bill.
  • Consultation and regulations to determine its power and remit.
  • Dependent on resources available to discharge its duties.
     
Action

  • The Fair Work Agency highlights the government's desire for a more targeted compliance approach to enforcement of employment laws. While there is already active enforcement on NMW, holiday pay may be more complex.

  • It is unlikely that the new Fair Work Agency will be active in the near future given the detailed consultation needed and the financial cost involved. However, it is proposed that it will have significant investigatory and enforcement powers which could lead to fines and criminal liability for senior executives. Employers should consider auditing their current pay practices in these areas to identify and address any current areas of non-compliance and any historic liabilities.  

In detail
  • The proposed Fair Work Agency will deal with enforcement of the National Minimum Wage Statutory Sick Pay, holiday pay, Employment Tribunal penalties and some aspects of the Modern Slavery Act. 

  • It will have a range of inspection and enforcement powers, including powers to obtain documents or information, enter business premises and remove or retain documents, request "labour market enforcement undertakings" are provided and apply to a court for a "labour market enforcement order" prohibiting or restricting certain actions (or require certain actions to be taken)

  • Where a person provides false information or documents, obstructs enforcement, fails to comply with a requirement of the agency and/or fails to comply with a labour market enforcement order, they will commit a criminal offence punishable by a fine or imprisonment. There is also provision for senior individuals in the company to be guilty of a criminal offence where an offence is committed by a company and the offence was committed with their consent or was attributable to any neglect on their part.

Impact

  • Currently most employment rights need to be enforced by individual workers through the Employment Tribunal system. A limited number of rights enforced by the State on behalf of workers namely by the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC's National Minimum Wage Enforcement team. By bringing together the enforcement of these rights, the government is seeking to "create a strong, recognisable single brand so individuals know where to go for help and lead to a more effective use of resource".

  • The Next Steps paper states that "the body will take a balanced approach to upholding workers' rights, with better support for the majority of employers who want to comply with the law, and tough action against the minority who deliberately flout it".

  • In relation to holiday pay, the Resolution Foundation suggests that 900,000 UK workers per year have their holiday pay withheld, with the Trades Union Congress estimating 2,000,000 affected individuals.                                                                                                                                                         

Other regulatory and enforcement roles

The government has also indicated that it is proposing to implement a number of other roles providing for oversight and enforcement of specific matters:

  • A new regulatory and enforcement unit for equal pay
  • A new office for Equality and Opportunity
  • Potentially the creation of an independent office of the whistleblower 
     
Action
  • Employers should follow these developments and be aware of any specific guidance and enforcement requirements impacting on their business. 
In detail

  • The new Office for Equality and Opportunity will replace the Equality Hub and will cover the overall framework of equality legislation in the UK, including disability policy, ethnic disparities, gender equality and LGBT+ rights. Its immediate priorities will be:

  • Strengthening the legal duty for employers to create and maintain working conditions free from harassment (through the Worker Protection Act);

    • Enshrining in law the full right to equal pay for ethnic minority people and disabled people;

    • Delivering a full trans-inclusive ban on conversion practices;

    • Championing the rights of disabled people;

    • Focusing on socio-economic disparities.

  • It has been stated in parliamentary debates that a proposal coming out of the previous government's whistleblowing review, and which will be the subject of further discussion is the creation of an independent office of the whistleblower to ensure whistleblowers have somewhere to go and have their complaint taken seriously.