PLANS for a "radical" reform of employment law have received a muted welcome from Welsh business leaders.
Business Secretary Vince Cable yesterday unveiled a package of measures including an overhaul of employment tribunals and moves that could see a reduction in the current 90-day consultation period when firms are planning to make more than 100 redundancies.
The moves also included plans for all claims to go to the conciliation service Acas before reaching an employment tribunal, options for a "rapid resolution scheme" to offer cheaper, quicker decisions on more straightforward claims, and a regional pilot scheme for smaller firms to use mediation.
Mr Cable also confirmed plans to increase the qualification period for making a claim for unfair dismissal from one to two years of employment from next April, and a consultation on "protected conversations" to allow employers to discuss issues such as retirement or poor performance without it being used at a subsequent tribunal claim
The Government believes the reforms will save employers £40m a year.
Small employers in Wales yesterday welcomed the move, but some legal experts said the measures would not have a significant impact on the number of tribunal claims.
Announcing the measures in a speech to the Engineering Employers Federation, Mr Cable said: "Our proposals strike an appropriate balance and we are keeping the necessary protections already in place to protect employees."
Mike Gorshkov, managing director of Cardiff-based recruitment firm Linea Resourcing, welcomed one move in particular.
"The "protected conversation" proposal offers both the employer and employee the opportunity to have constructive, off-the-record conversations concerning performance or other issues without instigating formal disciplinary measures," he said.
"This will not only help speed up problem resolution and improve communication but also will be more conducive to the pace and demands of modern business with less red tape and formality."
Fabio Grech, partner and head of employment law at Berry Smith, said the shake-up would come as a relief to many small businesses.
"As SMEs account for the majority of Welsh businesses, the economy in Wales would certainly benefit from these changes and the savings they will create nationally," he said. "It is vital, however, that during this consultation ministers balance the need for business growth against the security of employment rights.
"Following a 40% rise in tribunals over the last three years, it is certainly important for business to weed out unsubstantiated tribunal claims by disgruntled staff, which many SMEs are forced to settle on a commercial basis."
But Damian Phillips, partner at Darwin Gray and the South Wales representative on the Employment Lawyers Association, believed the impact of the measures may prove limited.
"While I have no doubt that the Government's proposals will be warmly greeted by some businesses, I don't believe the changes will have any great impact on the number of employment tribunal claims," he said. "I don't question the sentiments behind the proposals, but I do believe that it is a window dressing exercise.
"Exempting business with 10 or fewer employees from employment regulations may have some benefit, but the question is which regulations are to be exempted? When this was first raised some months ago, it was suggested that only new employment law would be exempted, meaning that all existing legislation will still apply, such as prohibiting discrimination under the Equality Act.
"Similarly, increasing the qualifying period for unfair dismissal from one year to two years will not prevent other claims being brought which don't require a minimum qualifying period, such as discrimination."
Jennifer Cottle, of Dolmans solicitors, said the proposals were clearly seeking to reduce the burden on small firms.
"It will be interesting to see more flesh on the proposals to assess how the Government thinks this will work in practice and to then consider the legal implications of the same," she said.
John Walker, National Chairman, Federation of Small Businesses, said more funding was needed for Acas as a result of the announcement.
"If properly implemented, these reforms should reduce the fear many small businesses have when taking on a new member of staff," he said.
"Reducing that fear, will go a long way to boost employment and is therefore a welcome step in the right direction."
Chairman of Acas Ed Sweeney welcomed the announcement.
"This announcement will mean significant changes to the work of our highly experienced conciliators and the systems and processes that support them," he said.
"We will be working with our sponsor department, BIS, over the coming months to work through the details more closely."
Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog
"Turn to us when you need help"
