Government reforms (2): Enterprise bill

government reforms - elizabeth towerWhat do we already know?

We updated you in our June Newsflash Queen’s speech that the Government had announced plans to implement the Enterprise Bill which would introduce:

  • measures to reduce regulation on small businesses to help create more jobs; and
  • a cap on exit payments/enhanced redundancy payments made to public sector workers to end six-figure payoffs.

What’s new?

The Enterprise Bill has had its first reading in the House of Lords on 16 September 2015 and the Government has also published a factsheet, available here, summarising the measures in the Enterprise Bill.

The key proposals relevant to employment practitioners are:

  • The introduction of a cap on exit payments made to public sector workers to limit such payments to £95,000;
  • Regulating the use of the word “apprenticeship” to cover only Government-accredited schemes and increasing the number of public sector apprenticeships offered (see our updates on this here); and
  • set up a Small Business Commissioner to help small firms handle disputes with larger businesses and reduce regulation on small businesses generally to help create more jobs.

The reform with the most impact is likely the cap on exit payments which could potentially include redundancy payments, pay in lieu of notice, sums paid to settle potential Tribunal claims and payments involved in providing unreduced benefits under pension schemes. However, we will have to wait for further details on this until separate regulations are published after Parliamentary approval of the Bill. These reforms are most likely to take effect in October 2016 or later.