The Enterprise and Regulatory Reform Act 2013 (“Act”) introduces a number of changes to the UK employment law landscape. The following two developments – which came into force last week – will be of key importance to Life Sciences employers:

1.   Whistleblowing reforms (effective 25 June 2013).

The Act has amended the existing whistleblowing legislation in four principal ways:

  • Public interest. A worker who makes a disclosure under the new whistleblowing regime must reasonably believe that the protected disclosure is “in the public interest”. The introduction of the public interest test is designed to limit complaints about breach of individual employment rights, which are of little or no concern to anyone other than the individual and the employer. That said, it may still be possible for individual employees to allege that a breach of their employment contract is in the public interest (where, for example, it relates to a discriminatory practice or culture in the workplace).
  • Good faith. The current good faith requirement necessary for a whistleblowing disclosure has been removed. However, if a disclosure is not made in good faith the Tribunal has a new power to reduce any compensatory award by up to 25%.
  • Vicarious liability. An employer will in future be vicariously liable if its employees (or agents) victimise a whistleblowing colleague, unless the employer can show that it took all reasonable steps to prevent such behaviour. Personal liability may also be imposed on the perpetrator of the victimisation.
  • Definition of ‘worker’. The definition of ‘worker’ has been expanded to include contractors working in the NHS. The Secretary of State also has the power to further broaden the definition, subject to Parliamentary approval.

These changes only apply to whistleblowing disclosures made on or after 25 June 2013. Disclosures made before this date will be dealt with under the old rules.

2.   Dismissals because of political opinions or affiliation (effective 25 June 2013).

The usual qualifying service requirement for unfair dismissal claims (i.e. one year for those employed before 6 April 2012, and two years for those employed on or after that date) will not apply to dismissals where the reason, or principal reason, for dismissal is, or relates to, the employee’s “political opinions or affiliation”. This does not mean that such dismissals will be automatically unfair, but simply that the qualifying service requirement will not apply. The statutory cap on compensation will still apply as usual.

This change will apply to dismissals taking effect on or after 25 June 2013.

What else should Life Sciences employers expect?

Over the coming months we will continue to see more and more employment law reforms. At the end of this month, there will be changes to the compensatory award for unfair dismissals (which will be capped at the lower of: (i) 52 weeks’ pay; or (ii) the existing statutory cap of £74,200) and new tribunal fees (e.g. unfair dismissal and discrimination claims will be subject to a £250 issue fee and £950 hearing fee). Also expected this summer is the expansion of the without prejudice rule so that any settlement discussion held with a view to terminating employment will be inadmissible as evidence in ordinary unfair dismissal proceedings, provided the employer has not behaved improperly. This development is somewhat limited as such discussions would still be admissible in connection with certain other claims (e.g. automatic unfair dismissal, discrimination and breach of contract). Employers will, therefore, need to exercise considerable caution before engaging in these settlement discussions.