The Enterprise and Regulatory Reform Act 2013 Explained

25 February 2015 | Employment Law

When you’re running a small business, keeping up with changes in legislation can be a minefield, with tough penalties brought in for any company found to be not complying.

We take a closer look at what the Act is and what it could mean for your business.

It can, therefore, be very time-consuming trying to follow changes in the law and interpreting how any new legislation could affect what you do.

The Enterprise and Regulatory Reform Act 2013 was unveiled, a new set of standards which affect every business in the UK.

The aim – to help small businesses in the UK

The Act is intended to be helpful to small businesses in the UK, helping to slash costs and reduce the risks which can drive up overheads unnecessarily.

The Enterprise and Regulatory Reform Act 2013 aims to do this in a number of different ways, but most importantly, it will be overhauling the current tribunal system, updating the copyright framework and simplifying regulation.

The tribunal process

Employees will need to contact ACAS.

Many small businesses fear the effect of an unfair tribunal case, with employees able to sue for compensation even if the employer can demonstrate there was nothing they could reasonably have done.

New health and safety regulations will stipulate that providing an employer has taken all reasonable steps, the previous carte blanche to sue for compensation will no longer apply.

This change is being introduced to try and reduce the amount of unnecessary protective steps businesses are currently forced to take to prevent cases for compensation being opened. It does not provide businesses with permission to skimp on health and safety but does allow them to get rid of unnecessary measures they may have in place, knowing they won’t have to pay out if they have taken reasonable precautions to look after their staff.

In cases where there is a dispute of some kind, the Act is proposing the increased use of settlement agreements, rather than proceeding to a full tribunal, making the process less painful, and less expensive, for everyone.

Employees wishing to lodge a complaint will now have a new duty to contact government body ACAS before they can file a suit. This increases the chances of a speedier and cheaper resolution for both sides.

For any cases of unfair dismissal, an additional pay cap is being introduced, to sit alongside the existing limit of £74,200. If a case for unfair dismissal is awarded, the employee will be entitled to the lower of 12 months’ pay or £74,200. This move makes any award more proportional to the actions taken and introduces greater certainty for employers.

Regulation Changes

The government has recognised that the existing regulation framework is slow and unhelpful, and where small businesses experience anticompetitive behaviour, it can be difficult to pursue a case.

Therefore the work of the Competitions Commission and the Office of Fair Trading are being combined and moved to the Competition and Markets Authority, a new body created specifically to deal with these problems.

This will introduce a fast-track system so small businesses can challenge anticompetitive behaviour more cheaply and much faster too, plus the right to bring a collective case.

Decision-making will be far more rapid and changes will be made to make it much simpler to introduce measures where required, particularly for anticompetitive mergers.

The body will also be undertaking market studies in an attempt to identify cases where small businesses are being adversely affected.

Where the actions of a business cross over more than one local authority area, they will now no longer have to get multiple permissions and advice and will be allowed to rely on the primary advice given to apply to the whole of their business practice. This removes red tape for businesses and should reduce costs.

Finally, the equality measures have been simplified but strengthened also in some areas. Employers who have been found by tribunal to be guilty of unequal pay can be forced to carry out an entire audit.


Very frequently new legislation increases the burden on new businesses but The Enterprise and Regulatory Reform Act 2013 actually seeks to reduce it. With a range of measures designed to cut costs without compromising working practices, this Act can only be good news for small businesses all over the UK

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