Business Secretary Vince Cable has set out plans for major reform of employment law.

The package of measures, announced on 23 November, include an overhaul of employment tribunals, expected to deliver £40 million a year in benefits to employers. There will also be a call for evidence on whether the 90-day minimum consultation period for collective redundancies should be reduced.

Dr Cable said the UK labour market was already one of the most flexible in the world but that many employers still felt that employment law was a barrier to growing their business.

He said his reforms were focused on “making it easier for businesses to take on staff and improving the process for when staff have to be let go”, adding: “We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business.“

The announcement includes a call for evidence on proposals to introduce compensated, no fault dismissal for firms with fewer than ten employees and on ways to slim down and simplify existing dismissal processes.

The Ministry of Justice will also shortly publish a consultation on two options for introducing fees for anyone wishing to take a claim to an employment tribunal. The first option is for a system that involves paying an initial fee to lodge a claim, with a second fee to take that claim to hearing. The second proposes introducing a £30,000 threshold, so those seeking an award above this level will pay more to bring a claim.

Other changes include:

• publishing a call for evidence on proposals to simplify the TUPE  (Transfer of Undertakings (Protection of Employment))  rules
• creating a universally portable CRB check that can be viewed by employers instantly online, from early 2013
• 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
• further consulting on measures to simplify compromise agreements, which will be renamed settlement agreements. Under a compromise agreement, when employment relationship has broken down irretrievably, an employee receives a negotiated financial sum to end their contract and agrees not to bring further claims against their employer
• announcing plans to consider how and whether to develop a rapid resolution scheme, which will offer a quicker and cheaper alternative to determination at an employment tribunal. Any proposals would be the subject of a consultation.

Link: Dr Cable’s speech

Government plans have been announced for a major reduction in health and safety rules, with the first changes taking effect from January.

An immediate consultation will begin abolish large numbers of health and safety regulations, with the intention of scrapping the first rules within months.

From 1 January, a new challenge panel will be introduced, which will allow businesses to get the decisions of health and safety inspectors overturned immediately if they have got it wrong.

The move follows publication on 28 November of the Löfstedt Review into health and safety legislation, commissioned by Employment Minister Chris Grayling in March.

The government has accepted the recommendations made by Professor Ragnar E Löfstedt in the report. They include a recommendation that health and safety law should not apply to self-employed people whose work activity poses no potential risk of harm to others, set to benefit around one million people.

Health and safety regulations will be reduced by a third rising to over a half over the next three years, through combining, simplifying and reducing approximately 200 existing regulations.

The report also makes recommendations to ensure that employers are not held responsible for damages when they have done all they can to manage risks.

Chris Grayling said: "By accepting the recommendations of Professor Löfstedt we are putting common sense back at the heart of health and safety. Our reforms will root out needless bureaucracy and be a significant boost to the million self-employed people who will be moved out of health and safety regulation altogether.

"We will also ensure our reforms put an emphasis on personal responsibility. It cannot be right that employers are responsible for damages when they have done all they can to manage the risk. Fundamentally we will ensure the health and safety system is fit for purpose through streamlining the maze of regulations and ensuring consistency across the board."

Link: Health and safety reform

A major change to the way that employers submit information on tax and national insurance for their employees is to begin next year with a pilot programme.

Following consultation on Real Time Information (RTI) – under which employers will report tax and national insurance deductions at the same time as they pay their employees, rather than at year end, via an annual P35 – the pilot will begin in April 2012 with volunteer software developers and employers.

Subject to successful completion of the pilot, employers will be required to start using the RTI system from April 2013, with all employers using RTI by October 2013.

HM Revenue & Customs (HMRC) announced on 23 November that it already has 300 volunteer employers for the pilot and, through software developers, is looking to recruit up to 1,300 more to join in July next year and a further 250,000 from November 2012, depending on the results of the first phase of the pilot.

David Gauke, Exchequer Secretary to the Treasury, said: "We need a PAYE system that can meet the demands of the 21st century workplace.

“Real Time Information will support improvements to the PAYE system making it more accurate for taxpayers and easier for employers and HMRC to administer.”

Link: HMRC information on RTI

Small and medium sized businesses in England are set to benefit from £95 million in government investment.

The government funding, announced on 10 November will support small and medium-sized enterprises (SMEs) considering investing in new capital assets. The government expects the funding to unlock around £500 million of new investment and create at least 4,000 jobs.

The money forms part of the government’s £1.4 billion Regional Growth Fund, which supports projects that can create jobs, are based in areas dependent on the public sector and are supported by private sector investment.

The new scheme will provide grants designed to support SMEs considering investment in new capital assets and creating new employment but which have been unable to secure commercial funding for their projects.

Business Minister Mark Prisk said: “These schemes will directly help SMEs that want to invest and create new jobs. They will deliver a shot in the arm to local communities and help small businesses drive local growth.”

RBS, NatWest and HSBC have agreed to facilitate the distribution of the £95 million. To qualify for the scheme run by NatWest and RBS, SMEs need a turnover of less than £25 million. To qualify for the HSBC scheme the SME will need a turnover of less than 50 million euros.

SMEs can qualify for a grant if they are going to invest in new capital assets, such as plant and machinery, and create new jobs but cannot get normal bank finance. Grants of up to £500,000 will be awarded alongside the award of a new bank loan on commercial terms.

Link: Regional Growth Fund information

HM Revenue & Customs (HMRC) has launched five new taskforces around the country to tackle tax evasion in sectors including fast food, property rentals and scrap metal dealing.

Announcing the taskforces on 7 November, Exchequer Secretary David Gauke said honest businesses had nothing to worry about but warned: “We will not tolerate those who break the rules.

“It doesn’t matter who you are – HMRC can and will track you down. You will face a heavy fine, a possible criminal prosecution and ultimately jail.

“Taskforces are a direct result of the government’s £917 million spending review re-investment to tackle tax evasion, avoidance and fraud, which aims to raise an additional £7 billion each year by 2014/15.”

The five taskforces will target:

• scrap metal dealers in Scotland, focusing on those who are deliberately suppressing their income or inflating expenditure to evade paying tax
• construction traders who are self-employed or run their own company who suppress sales or over-claim expenses in the North West and North Wales
• taxpayers not submitting their statutory returns for corporation tax, income tax self assessment, PAYE and VAT in the South East
• fast food outlets deliberately falsifying their records and mis-declaring their true sales levels to avoid paying the correct taxes in Scotland
• landlords – owning or renting three or more properties – evading their tax responsibilities in North West and North Wales.

Link: Fighting fraud and tax evasion

A £250 million plan will be launched in the new year, designed to give businesses the power to design, develop and purchase vocational training.

Announcing the scheme on 17 November, Prime Minister David Cameron said: “I know times are tough – especially for young people – who are trying to get their foot in the door and launch their career.

“That is why I am determined to do all that we can to give people the very best skills, training and opportunities to succeed; and why despite tough spending decisions we are investing in record number of apprenticeships.

“We are seeing an incredible take up of these apprenticeship places. I want that to continue, which is why we are taking action to make it easier to take on apprentices, and now we are giving employers the power to take control of the training so that it best meets the skills they need.

“I hope this radical new approach will encourage even more employers to take on apprentices and ensure that the UK workforce has the skills we need to boost growth.”

The Government expects to issue a formal prospectus on the fund jointly with the UK Commission for Employment and Skills early in 2012 so that projects can begin later in the year.

Employers will be invited to bid for a share of the new £250 million government fund so that they can invest directly in the training they need.

Link: UK Commission for Employment and Skills

A new small claims service is to be introduced at the Patents County Court (PCC), helping small and medium-sized businesses to protect their copyright, trade marks and designs.

With small firms often put off enforcing their intellectual property (IP) rights by high costs, the new process, which is set to be operational by next November, will limit fixed costs and allow damages of up to £5,000 per case. The Intellectual Property Office (IPO) estimates that around 150 firms will benefit from the service every year, providing an annual boost to UK business of £350,000.

Announcing the move on 15 November, Minister for Intellectual Property Baroness Wilcox said: “A small claims process means businesses will not have to fight through lengthy court battles instead of concentrating on growing their business.

“Businesses know how important it is to protect their rights and have been calling for changes to be made to the system. The government is acting on these concerns because a strong intellectual property system will enable innovative small companies to grow and support the UK economy. We hope to have the new system in place by this time next year.”

Justice Minister Jonathan Djanogly said: “It is clearly much better for the economy if businesses are spending their time and money on trading and growth, rather than on unnecessarily complicated legal processes. That is why we are modernising the justice system in order to provide simpler, quicker and more cost-efficient ways to resolve disputes."

The recommendation for a small claims service was made in the Hargreaves Review of Intellectual Property and Growth.Evidence presented to the review indicated that around one in six (17 per cent) of small and medium sized businesses had given up attempting to enforce their rights due to high court costs.

Link: Intellectual Property Office