Employment tribunal to lose power to make wider recommendations in discrimination cases

Out-Law News | 10 May 2013 | 4:43 pm | 2 min. read

The Government is to remove the Employment Tribunal's power to make recommendations to employers that go beyond the specifics of a particular discrimination claim, it has announced.

The measure will be contained in a draft Deregulation Bill, to be published during the current Parliamentary session. Announced as part of the Queen's Speech, the draft Bill will set out a range of measures to "reduce the amount of regulation with which businesses, individuals and public bodies have to comply", it said. It will also exempt self-employed people whose work does not pose the risk of harm to others from the scope of health and safety law, as previously announced by the Government.

The speech also set out a proposed National Insurance Contributions Bill, which will create a general anti-avoidance rule for national insurance contributions (NICs), restrict the use of offshore payroll companies as intermediaries and give every company an annual exemption on its first £2,000 of liability for NICs. An Immigration Bill, which among other measures will create tougher penalties for employers who employ workers who do not have the right to work in the UK, will also be published, according to the speech.

Employment tribunals were given the broad power to make recommendations for the benefit of the wider workforce in 2010, in relation to discrimination claims brought under the Equality Act. Previously a tribunal's power to make recommendations was limited to what steps an employer should take to reduce the adverse effect of the discrimination on the person bringing the claim, but this could only be used if that person was still working for the company. However, tribunals do not have the power to compel employers to follow their recommendations.

Employment law expert Stuart Neilson of Pinsent Masons, the law firm behind Out-Law.com, said that the proposed change amount to "a minor point in reality", as the existing power was rarely used by tribunals.

"This announcement is consistent with a general trend by this Government to reduce regulatory burdens on businesses," he said. "The majority of UK laws in relation to discrimination stem from our obligations under European law. In previous announcements, the Government has indicated its desire to remove 'gold plating' from those laws where the UK goes beyond European requirements, such as in the recent consultation in relation to changes to TUPE law."

Commenting on the Queen's Speech more generally, Neilson pointed out that there were not as many employment-law related announcements as in previous years. However, previously-announced work on new tribunal rules and the introduction of fees, the proposed removal of a change of service provider from the scope of TUPE and the introduction of employee shareholders would continue, he said.

The proposed changes to immigration law would allow for "tough action" and more substantial fines against businesses that use illegal labour. The proposed Bill would also close a number of gaps in enforcement officers' powers, and restrict appeals in immigration cases to only those that raise important issues. Landlords would also be required to check the immigration status of their tenants, while illegal immigrants would be prevented from obtaining UK driving licenses. Migrant access to the NHS will also be regulated to ensure that temporary migrants make a contribution to the running of the service, the Government said.

A new Employment Allowance, giving every UK business and charity a £2,000 saving on its annual national insurance bill, was announced by the Chancellor of the Exchequer as part of his Budget statement in March. The proposed National Insurance Contributions Bill would introduce this relief from April 2014, according to a document published by the Government alongside the Queen's Speech. The relief is intended to encourage small businesses in particular to hire more staff.

The proposed Bill would also extend the general anti-abuse rule (GAAR) designed to prevent abusive tax schemes to cover NICs and strengthen legislation to prevent businesses from using offshore employment payroll companies for the purposes of tax avoidance. The Bill would also remove the presumption of self-employment status from members of limited liability partnerships.