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Employment Law Journal: October 2012

Benedict Gorner analyses the government’s proposals to reduce unfair dismissal awards, introduce a code on settlement agreements and simplify the tribunal rules

On 14 September, the government announced proposals for the next stage in its comprehensive review of employment law. Although the majority of the proposals had been outlined before, the announcement provided significantly more detail about plans to:

Adrian Martin discusses whether the introduction of tribunal fees could be a breach of the right to a fair trial under the European Convention of Human Rights

In recent months, a number of changes or proposed changes to the employment tribunal system have been announced. These include: the move to unfair dismissal cases being heard by employment judges sitting alone, Underhill J’s review and re-write of the employment tribunals rules of procedure, and the government’s proposal to charge fees in the employment tribunals. The proposed introduction of fees is the most controversial of these. It has led to a number of concerns being raised about access to justice, including a suggestion that the introduction of fees could be in breach of the government’s obligations under the European Convention of Human Rights (the Convention).

A Court of Appeal ruling has added to confusion about whether it is acceptable for departing employees to prepare to enter into competition with their employer, argues Gary Freer

In Ranson v Customer Systems plc [2012], the Court of Appeal has taken a surprisingly liberal approach to what employees may legitimately do during their notice period to prepare to compete in the future with their existing employer. It raises difficult and important points of law on:

Susie Al-Qassab considers the consequences of three recent decisions in the EAT on the mutuality of obligation test

To establish employee status and enjoy the rights and protections only available to employees, casual workers need to show:

Michelle Last and Nicholas Robertson contemplate a recent High Court ruling on whether the deterrent effect of a repayment provision was so great that it prevented an employee from leaving the company

It is common to see benefit repayment provisions in employment contracts and sale and purchase agreements (SPAs). These provisions are usually designed to encourage the employee’s continued employment in return for some form of financial or other benefit provided by the employer. As a general rule, to be effective, repayment provisions should not be so harsh that they amount to a penalty or a restraint of trade. Provided a repayment provision does not fall foul of either of these grounds, it should normally be difficult to challenge. A recent High Court case has, however, suggested that consideration also needs to be given to the disincentive effect on the employee of any repayment provision. If it is strong enough to deter an employee from terminating their employment, it may amount to an unlawful restraint of trade (20:20London Ltd v Peter Riley [2012]), and so its enforceability may be open to challenge.

The government is proposing to cut the consultation period for large-scale redundancies to improve the standard of such consultations, report Oliver Brettle and Daniella Ebrahimoff

On 21 July 2012, the Department for Business Innovation and Skills (BIS) published a consultation paper setting out proposals for changes to the collective redundancy regime. The publication of the paper was largely a response to the call for evidence conducted in November 2011, which brought up a number of issues with the existing rules on collective redundancy consultation. The deadline for submitting responses to the consultation paper, entitled ‘Collective redundancies: consultation on changes to the rules’, was 19 September 2012. The government will now publish its response as soon as possible within three months of the consultation closing.

Morgan Lewis

Matthew Howse and Celia Kendrick examine the impact of the government’s proposals to reform the law on the remuneration of directors in publicly listed companies

In a speech to the House of Commons in January 2012, the business secretary, Vince Cable, outlined a number of proposals to reform executive pay within listed companies. The government’s aim was to address the discrepancies between top executives’ pay and their companies’ performance, the problem being, according to the government, that the most senior executives’ pay has continued to rise each year even when their companies’ financial performance has stagnated or deteriorated. The announcement came at a time when criticism of executive pay was a constant feature of media reporting. Mr Cable outlined four aims to address this ‘clear market failure’: