The most radical reform to the employment law system for decades has been outlined by Business Secretary Vince Cable as part of the Government’s plan for growth.

Changes will include an overhaul of employment tribunals, which is expected to deliver £40 million a year in benefits to employers. Ministers will also start a call for evidence on whether the 90 day minimum consultation period for collective redundancies is restricting businesses and should be reduced.

In response to the suggestion that dismissal laws are too onerous for small businesses in particular, the Government will launch a call for evidence on two proposals.

Firstly it will seek views on a proposal to introduce compensated no fault dismissal for micro firms, with fewer than ten employees. Secondly, it will look at ways to slim down existing dismissal processes, how they might be simplified, including potentially working with the Advisory, Conciliation and Arbitration Service (Acas) to make changes to their Code, or supplementary guidance for small businesses.

The Ministry of Justice will shortly publish a consultation on the introduction of fees for anyone wishing to take a claim to an employment tribunal.

The Government has also committed to:

• Requiring all employment disputes to go to the Advisory, Conciliation and Arbitration Service (Acas) to be offered pre-claim conciliation before going to a tribunal and from April 2012 increasing the qualification period for unfair dismissal from one to two years.
• Publishing a consultation in the new year on ‘protected conversations’ which allows employers to discuss issues like retirement or poor performance in an open manner with staff - without this being used in any subsequent tribunal claims.
• A further consultation on measures to simplify compromise agreements, which will be renamed ‘settlement agreements’.

Some of these changes will require the Government to introduce primary legislation, subject to the Parliamentary timetable.