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Ending the Employment Relationship - TUC Response to the BIS Consultation

Issue date

TUC Response to the BIS Consultation

Overview

The TUC is firmly opposed to the government's proposals on ending the employment relationship. The government claims that the measures will encourage a more flexible labour market, enabling employers to recruit staff and employees to remain in employment. In practice the main effect will be to make it easier and cheaper for employers to sack employees.

The TUC recognises that compromise agreements are widely used in workplaces to resolve disputes swiftly and to avoid potential employment tribunal claims. However, in our opinion, the proposals on confidential negotiations will promote bad manage practices and are open to abuse by employers. They will send a clear signal that employers are free to sack staff for arbitrary reasons without the need to follow a fair procedure. The TUC believes that the proposals amount to little more than 'Beecroft-lite'.

The measures are also likely to have unforeseen consequences for employers. The complex rules on whether conversations and offers can be admitted as evidence at an employment tribunal will create uncertainty and confusion for employers and will generate lengthy and costly legal disputes.

The TUC is also firmly opposed to the government's proposals to reduce the limit for compensatory awards in unfair dismissal cases. These measures will mean that some employees will no longer be fully compensated for the unlawful actions of their employers. The TUC is concerned that the proposals will also disproportionately affect some of the most vulnerable in society, including the disabled and older workers. The proposal to link compensation to a single year's earnings will mean that the lower paid and employees who work part-time will also lose out.

It is a matter of serious concern to the TUC that the government has decided to legislate on these proposals before public consultation has been completed. Provisions implementing these measures are incorporated in the Enterprise and Regulatory Reform Bill, which is currently being scrutinised by the House of Lords, having already completed its passage through the House of Commons. It appears that the government is intent on driving through these proposals regardless of the findings from the public consultation and without having fully considered the implications for employers, employees and the wider economy.

Furthermore, the TUC is concerned that the government's proposals will do nothing to create jobs or generate growth. They will substantially increase job insecurity and undermine workforce morale. This in turn will damage consumer confidence and suppress demand in the economy - stifling rather than stimulating growth.

The proposals will also reduce the financial bill for those employers who adopt unlawful practices. This will create unfair competition for law abiding firms. The TUC therefore calls on the government to withdraw its plans.

Download the full TUC response: Ending the Employment Relationship (PDF).

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