Enterprise and Regulatory Reform Act 2013

PART 1 — UK Green Investment Bank

Extension of meaning of “worker”

1

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Designation of the UK Green Investment Bank

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• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) References in this Part to the UK Green Investment Bank are to the public company limited by shares incorporated on 15 May 2012 with the company number SC424067 and with the name UK Green Investment Bank plc.

• (10) In this Part “UK Green Investment Bank company” means—

• (a) the UK Green Investment Bank, or

• (b) a company that is or at any time has been in the same group as the Bank.

• (11) For the purposes of subsection (10) a company is to be regarded as being in the same “group” as the UK Green Investment Bank, if, for the purposes of section 1161(5) of the Companies Act 2006, the company is a group undertaking in relation to the UK Green Investment Bank.

Equality Act 2010: obtaining information for proceedings

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial assistance

4

• (1) ... the Secretary of State may, with the consent of the Treasury, give a UK Green Investment Bank company financial assistance at any time when the Crown holds shares in it or another UK Green Investment Bank company.

• (2) The financial assistance may be given in any form that the Secretary of State, with the consent of the Treasury, considers appropriate.

• (3) It may in particular be given by way of—

• (a) grants,

• (b) loans,

• (c) guarantees,

• (d) the purchase of share capital of the company, or

• (e) the transfer of assets or rights to the company.

• (4) The financial assistance may be provided subject to such terms and conditions as the Secretary of State, with the consent of the Treasury, considers appropriate (including, in the case of a grant or a loan, conditions requiring repayment or, in the case of a guarantee, conditions requiring reimbursement of any sums paid under it).

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) Nothing in this section affects the exercise of any power of the Treasury or the Secretary of State to give financial assistance to a UK Green Investment Bank company otherwise than under this section at a time when the Crown does not hold shares in it or another UK Green Investment Bank company.

Accounts, reports and payments to directors

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Documents to be laid before Parliament

6

• (1) Subsection (2) applies if—

• (a) ... copies of the UK Green Investment Bank's annual accounts and reports are, in accordance with section 437 of the Companies Act 2006, laid before it in general meeting, and

• (b) as at the date of the meeting, the Crown holds shares in a UK Green Investment Bank company.

• (2) The Secretary of State must, as soon as practicable after the meeting, lay a copy of the annual accounts and reports before Parliament.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 2 — Employment

Conciliation

Conciliation before institution of proceedings

7

• (1) After section 18 of the Employment Tribunals Act 1996 (conciliation) insert—

(18A) (1) Before a person (“the prospective claimant”) presents an application to institute relevant proceedings relating to any matter, the prospective claimant must provide to ACAS prescribed information, in the prescribed manner, about that matter. This is subject to subsection (7). (2) On receiving the prescribed information in the prescribed manner, ACAS shall send a copy of it to a conciliation officer. (3) The conciliation officer shall, during the prescribed period, endeavour to promote a settlement between the persons who would be parties to the proceedings. (4) If— (a) during the prescribed period the conciliation officer concludes that a settlement is not possible, or (b) the prescribed period expires without a settlement having been reached, the conciliation officer shall issue a certificate to that effect, in the prescribed manner, to the prospective claimant. (5) The conciliation officer may continue to endeavour to promote a settlement after the expiry of the prescribed period. (6) In subsections (3) to (5) “settlement” means a settlement that avoids proceedings being instituted. (7) A person may institute relevant proceedings without complying with the requirement in subsection (1) in prescribed cases. The cases that may be prescribed include (in particular)— - cases where the requirement is complied with by another person instituting relevant proceedings relating to the same matter; - cases where proceedings that are not relevant proceedings are instituted by means of the same form as proceedings that are; - cases where section 18B applies because ACAS has been contacted by a person against whom relevant proceedings are being instituted. (8) A person who is subject to the requirement in subsection (1) may not present an application to institute relevant proceedings without a certificate under subsection (4). (9) Where a conciliation officer acts under this section in a case where the prospective claimant has ceased to be employed by the employer and the proposed proceedings are proceedings under section 111 of the Employment Rights Act 1996, the conciliation officer may in particular— (a) seek to promote the reinstatement or re-engagement of the prospective claimant by the employer, or by a successor of the employer or by an associated employer, on terms appearing to the conciliation officer to be equitable, or (b) where the prospective claimant does not wish to be reinstated or re-engaged, or where reinstatement or re-engagement is not practicable, seek to promote agreement between them as to a sum by way of compensation to be paid by the employer to the prospective claimant. (10) In subsections (1) to (7) “prescribed” means prescribed in employment tribunal procedure regulations. (11) The Secretary of State may by employment tribunal procedure regulations make such further provision as appears to the Secretary of State to be necessary or expedient with respect to the conciliation process provided for by subsections (1) to (8). (12) Employment tribunal procedure regulations may (in particular) make provision— (a) authorising the Secretary of State to prescribe, or prescribe requirements in relation to, any form which is required by such regulations to be used for the purpose of providing information to ACAS under subsection (1) or issuing a certificate under subsection (4); (b) requiring ACAS to give a person any necessary assistance to comply with the requirement in subsection (1); (c) for the extension of the period prescribed for the purposes of subsection (3); (d) treating the requirement in subsection (1) as complied with, for the purposes of any provision extending the time limit for instituting relevant proceedings, by a person who is relieved of that requirement by virtue of subsection (7)(a). (18B) (1) This section applies where— (a) a person contacts ACAS requesting the services of a conciliation officer in relation to a matter that (if not settled) is likely to give rise to relevant proceedings against that person, and (b) ACAS has not received information from the prospective claimant under section 18A(1). (2) This section also applies where— (a) a person contacts ACAS requesting the services of a conciliation officer in relation to a matter that (if not settled) is likely to give rise to relevant proceedings by that person, and (b) the requirement in section 18A(1) would apply to that person but for section 18A(7). (3) Where this section applies a conciliation officer shall endeavour to promote a settlement between the persons who would be parties to the proceedings. (4) If at any time— (a) the conciliation officer concludes that a settlement is not possible, or (b) a conciliation officer comes under the duty in section 18A(3) to promote a settlement between the persons who would be parties to the proceedings, the duty in subsection (3) ceases to apply at that time. (5) In subsections (3) and (4) “settlement” means a settlement that avoids proceedings being instituted. (6) Subsection (9) of section 18A applies for the purposes of this section as it applies for the purposes of that section.

• (2) Schedule 1 (conciliation: minor and consequential amendments) has effect.

Extension of limitation periods to allow for conciliation

8

Schedule 2 (extension of limitation periods to allow for conciliation) has effect.

Extended power to define “relevant proceedings” for conciliation purposes

9

• (1) Section 18 of the Employment Tribunals Act 1996 (conciliation) is amended as follows.

• (2) In subsection (8) (power of Secretary of State and Lord Chancellor to amend list in subsection (1) of section 18), for paragraphs (a) and (b) substitute “ amend the definition of “relevant proceedings” in subsection (1) by adding to or removing from the list in that subsection particular types of employment tribunal proceedings. ”

• (3) After subsection (8) insert—

(9) An order under subsection (8) that adds employment tribunal proceedings to the list in subsection (1) may amend an enactment so as to extend the time limit for instituting those proceedings in such a way as appears necessary or expedient in order to facilitate the conciliation process provided for by section 18A. (10) An order under subsection (8) that removes employment tribunal proceedings from the list in subsection (1) may— (a) repeal or revoke any provision of an enactment that, for the purpose mentioned in subsection (9), extends the time limit for instituting those proceedings; (b) make further amendments which are consequential on that repeal or revocation.

ACAS

ACAS: prohibition on disclosure of information

10

In Part 6 of the Trade Union and Labour Relations (Consolidation) Act 1992 (ACAS etc), after section 251A insert—

(251B) (1) Information held by ACAS shall not be disclosed if the information— (a) relates to a worker, an employer of a worker or a trade union (a “relevant person”), and (b) is held by ACAS in connection with the provision of a service by ACAS or its officers. This is subject to subsection (2). (2) Subsection (1) does not prohibit the disclosure of information if— (a) the disclosure is made for the purpose of enabling or assisting ACAS to carry out any of its functions under this Act, (b) the disclosure is made for the purpose of enabling or assisting an officer of ACAS to carry out the functions of a conciliation officer under any enactment, (c) the disclosure is made for the purpose of enabling or assisting— (i) a person appointed by ACAS under section 210(2), or (ii) an arbitrator or arbiter appointed by ACAS under any enactment, to carry out functions specified in the appointment, (d) the disclosure is made for the purposes of a criminal investigation or criminal proceedings (whether or not within the United Kingdom), (e) the disclosure is made in order to comply with a court order, (f) the disclosure is made in a manner that ensures that no relevant person to whom the information relates can be identified, or (g) the disclosure is made with the consent of each relevant person to whom the information relates. (3) Subsection (2) does not authorise the making of a disclosure which contravenes the Data Protection Act 1998. (4) A person who discloses information in contravention of this section commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale. (5) Proceedings in England and Wales for an offence under this section may be instituted only with the consent of the Director of Public Prosecutions. (6) For the purposes of this section information held by— (a) a person appointed by ACAS under section 210(2) in connection with functions specified in the appointment, or (b) an arbitrator or arbiter appointed by ACAS under any enactment in connection with functions specified in the appointment, is information that is held by ACAS in connection with the provision of a service by ACAS.

Procedure for deciding tribunal cases

Decisions by legal officers

11

• (1) In section 4 of the Employment Tribunals Act 1996 (composition of a tribunal), after subsection (6C) insert—

(6D) A person appointed as a legal officer in accordance with regulations under section 1(1) may determine proceedings in respect of which an employment tribunal has jurisdiction, or make a decision falling to be made in the course of such proceedings, if— (a) the proceedings are of a description specified in an order under this subsection made by the Secretary of State and the Lord Chancellor acting jointly, and (b) all the parties to the proceedings consent in writing; and any determination or decision made under this subsection shall be treated as made by an employment tribunal.

• (2) In section 41(2) of that Act (orders etc subject to affirmative resolution procedure), after “section 4(4)” insert “ or (6D) ”.

Composition of Employment Appeal Tribunal

12

• (1) The Employment Tribunals Act 1996 is amended as set out in subsections (2) to (4).

• (2) In section 28 (composition of Appeal Tribunal), for subsections (2) to (4A) substitute—

(2) Proceedings before the Appeal Tribunal are to be heard by a judge alone. This is subject to subsections (3) to (6) and to any provision made by virtue of section 30(2)(f) or (2A). (3) A judge may direct that proceedings are to be heard by a judge and either two or four appointed members. (4) A judge may, with the consent of the parties, direct that proceedings are to be heard by a judge and either one or three appointed members. (5) The Lord Chancellor may by order provide for proceedings of a description specified in the order to be heard by a judge and either two or four appointed members. (6) In proceedings heard by a judge and two or four appointed members, there shall be an equal number of— (a) employer-representative members, and (b) worker-representative members. (7) In this section— - “employer-representative members” means appointed members whose knowledge or experience of industrial relations is as representatives of employers; - “worker-representative members” means appointed members whose knowledge or experience of industrial relations is as representatives of workers.

• (3) In section 30 (Appeal Tribunal procedure rules), in subsection (2)(f) (provision for dealing with interlocutory matters), for the words from “otherwise” to the end substitute “ by an officer of the Appeal Tribunal ”.

• (4) In section 41(2) (orders etc subject to affirmative resolution procedure), before “or 40” insert “ , 28(5) ”.

• (5) In consequence of the amendment made by subsection (2), omit paragraph 46 of Schedule 8 to the Tribunals, Courts and Enforcement Act 2007.

Unfair dismissal

Dismissal for political opinions: no qualifying period of employment

13

In section 108 of the Employment Rights Act 1996 (qualifying period of employment), after subsection (3) insert—

(4) Subsection (1) does not apply if the reason (or, if more than one, the principal reason) for the dismissal is, or relates to, the employee's political opinions or affiliation.

Confidentiality of negotiations before termination of employment

14

After section 111 of the Employment Rights Act 1996 insert—

(111A) (1) Evidence of pre-termination negotiations is inadmissible in any proceedings on a complaint under section 111. This is subject to subsections (3) to (5). (2) In subsection (1) “pre-termination negotiations” means any offer made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee. (3) Subsection (1) does not apply where, according to the complainant's case, the circumstances are such that a provision (whenever made) contained in, or made under, this or any other Act requires the complainant to be regarded for the purposes of this Part as unfairly dismissed. (4) In relation to anything said or done which in the tribunal's opinion was improper, or was connected with improper behaviour, subsection (1) applies only to the extent that the tribunal considers just. (5) Subsection (1) does not affect the admissibility, on any question as to costs or expenses, of evidence relating to an offer made on the basis that the right to refer to it on any such question is reserved.

Power by order to increase or decrease limit of compensatory award

15

• (1) The Secretary of State may by order made by statutory instrument amend section 124 of the Employment Rights Act 1996 (limit of compensatory award etc) so as to vary the limit imposed for the time being by subsection (1) of that section.

• (2) The limit as so varied may be—

• (a) a specified amount, or

• (b) the lower of—

• (i) a specified amount, and

• (ii) a specified number multiplied by a week's pay of the individual concerned.

• (3) Different amounts may be specified by virtue of subsection (2)(a) or (b)(i) in relation to employers of different descriptions.

• (4) An amount specified by virtue of subsection (2)(a) or (b)(i)—

• (a) may not be less than median annual earnings;

• (b) may not be more than three times median annual earnings.

• (5) A number specified by virtue of subsection (2)(b)(ii) may not be less than 52.

• (6) An order under this section may make consequential, supplemental, transitional, transitory or saving provision.

• (7) The consequential provision that may be made under subsection (6) includes provision inserting a reference to section 124 of the Employment Rights Act 1996 in section 226(3) of that Act (week's pay: calculation date in unfair dismissal cases).

• (8) A statutory instrument containing an order under this section is not to be made unless a draft of the instrument has been laid before each House of Parliament and approved by a resolution of each House.

• (9) In this section “median annual earnings” means—

• (a) the latest figure for median gross annual earnings of full-time employees in the United Kingdom published by the Statistics Board (disregarding any provisional figures), or

• (b) if that figure was published by the Statistics Board more than two years before the laying of the draft of the statutory instrument in question, an estimate of the current amount of such earnings worked out in whatever way the Secretary of State thinks fit.

• (10) In section 34 of the Employment Relations Act 1999 (indexation of amounts etc), after subsection (4) insert—

(4A) A reference in this section to a sum specified in section 124(1) of the Employment Rights Act 1996 does not include anything specified by virtue of section 15(2)(b)(ii) of the Enterprise and Regulatory Reform Act 2013 (specified number multiplied by a week's pay of the individual concerned). (4B) As regards a sum specified in section 124(1) of the Employment Rights Act 1996, the duty under subsection (2) to make an order with effect from 6 April in a particular year does not arise where an order varying such a sum with effect from a day within 12 months before that date has been made under section 15(1) of the Enterprise and Regulatory Reform Act 2013.

Financial penalties

Power of employment tribunal to impose financial penalty on employers etc

16

• (1) After section 12 of the Employment Tribunals Act 1996 insert—

(12A) (1) Where an employment tribunal determining a claim involving an employer and a worker— (a) concludes that the employer has breached any of the worker's rights to which the claim relates, and (b) is of the opinion that the breach has one or more aggravating features, the tribunal may order the employer to pay a penalty to the Secretary of State (whether or not it also makes a financial award against the employer on the claim). (2) The tribunal shall have regard to an employer's ability to pay— (a) in deciding whether to order the employer to pay a penalty under this section; (b) (subject to subsections (3) to (7)) in deciding the amount of a penalty. (3) The amount of a penalty under this section shall be— (a) at least £100; (b) no more than £5,000. This subsection does not apply where subsection (5) or (7) applies. (4) Subsection (5) applies where an employment tribunal— (a) makes a financial award against an employer on a claim, and (b) also orders the employer to pay a penalty under this section in respect of the claim. (5) In such a case, the amount of the penalty under this section shall be 50% of the amount of the award, except that— (a) if the amount of the financial award is less than £200, the amount of the penalty shall be £100; (b) if the amount of the financial award is more than £10,000, the amount of the penalty shall be £5,000. (6) Subsection (7) applies, instead of subsection (5), where an employment tribunal— (a) considers together two or more claims involving different workers but the same employer, and (b) orders the employer to pay a penalty under this section in respect of any of those claims. (7) In such a case— (a) the amount of the penalties in total shall be at least £100; (b) the amount of a penalty in respect of a particular claim shall be— (i) no more than £5,000, and (ii) where the tribunal makes a financial award against the employer on the claim, no more than 50% of the amount of the award. But where the tribunal makes a financial award on any of the claims and the amount awarded is less than £200 in total, the amount of the penalties in total shall be £100 (and paragraphs (a) and (b) shall not apply). (8) Two or more claims in respect of the same act and the same worker shall be treated as a single claim for the purposes of this section. (9) Subsection (5) or (7) does not require or permit an order under subsection (1) (or a failure to make such an order) to be reviewed where the tribunal subsequently awards compensation under— (a) section 140(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 (failure to comply with tribunal's recommendation), (b) section 117 of the Employment Rights Act 1996 (failure to reinstate etc.), (c) section 124(7) of the Equality Act 2010 (failure to comply with tribunal's recommendation), or (d) any other provision empowering the tribunal to award compensation, or further compensation, for a failure to comply (or to comply fully) with an order or recommendation of the tribunal. (10) An employer's liability to pay a penalty under this section is discharged if 50% of the amount of the penalty is paid no later than 21 days after the day on which notice of the decision to impose the penalty is sent to the employer. (11) In this section— - “claim”— 1. means anything that is referred to in the relevant legislation as a claim, a complaint or a reference, other than a reference made by virtue of section 122(2) or 128(2) of the Equality Act 2010 (reference by court of question about a non-discrimination or equality rule etc), and 2. also includes an application, under regulations made under section 45 of the Employment Act 2002, for a declaration that a person is a permanent employee; - “employer” has the same meaning as in Part 4A of the Employment Rights Act 1996, and also— 1. in relation to an individual seeking to be employed by a person as a worker, includes that person; 2. in relation to a right conferred by section 47A or 63A of the Employment Rights Act 1996 (right to time off for young person for study or training), includes the principal within the meaning of section 63A(3) of that Act; 3. in relation to a right conferred by the Agency Workers Regulations 2010 (S.I. 2010/93), includes the hirer within the meaning of those Regulations and (where the worker is not actually employed by the temporary work agency) the temporary work agency within that meaning; - “financial award” means an award of a sum of money, but does not including anything payable by virtue of section 13; - “worker” has the same meaning as in Part 4A of the Employment Rights Act 1996, and also includes an individual seeking to be employed by a person as a worker. (12) The Secretary of State may by order— (a) amend subsection (3), (5) or (7) by substituting a different amount; (b) amend subsection (5), (7) or (10) by substituting a different percentage; (c) amend this section so as to alter the meaning of “claim”. (13) The Secretary of State shall pay sums received under this section into the Consolidated Fund.

• (2) Schedule 3 (financial penalties: minor and consequential amendments) has effect.

Protected disclosures

Disclosures not protected unless believed to be made in the public interest

17

In section 43B of the Employment Rights Act 1996 (disclosures qualifying for protection), in subsection (1), after “in the reasonable belief of the worker making the disclosure,” insert “ is made in the public interest and ”.

Power to reduce compensation where disclosure not made in good faith

18

• (1) Omit the words “in good faith” in the following provisions of Part 4A of the Employment Rights Act 1996 (protected disclosures)—

• (a) subsection (1) of section 43C (disclosure to employer or other responsible person);

• (b) paragraph (b) of section 43E (disclosure to Minister of the Crown);

• (c) subsection (1)(a) of section 43F (disclosure to prescribed person).

• (2) In section 43G of that Act (disclosure in other cases), in subsection (1)—

• (a) omit paragraph (a);

• (b) in paragraph (b), for “he” substitute “ the worker ”.

• (3) In section 43H of that Act (disclosure of exceptionally serious failure), in subsection (1)—

• (a) omit paragraph (a);

• (b) in paragraph (b), for “he” substitute “ the worker ”.

• (4) In section 49 of that Act (remedies for detriment suffered in employment), after subsection (6) insert—

(6A) Where— (a) the complaint is made under section 48(1A), and (b) it appears to the tribunal that the protected disclosure was not made in good faith, the tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the worker by no more than 25%.

• (5) In section 123 of that Act (compensatory award for unfair dismissal), after subsection (6) insert—

(6A) Where— (a) the reason (or principal reason) for the dismissal is that the complainant made a protected disclosure, and (b) it appears to the tribunal that the disclosure was not made in good faith, the tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the complainant by no more than 25%.

Worker subjected to detriment by co-worker or agent of employer

19

• (1) In section 47B of the Employment Rights Act 1996 (protected disclosures), after subsection (1) insert—

(1A) A worker (“W”) has the right not to be subjected to any detriment by any act, or any deliberate failure to act, done— (a) by another worker of W's employer in the course of that other worker's employment, or (b) by an agent of W's employer with the employer's authority, on the ground that W has made a protected disclosure. (1B) Where a worker is subjected to detriment by anything done as mentioned in subsection (1A), that thing is treated as also done by the worker's employer. (1C) For the purposes of subsection (1B), it is immaterial whether the thing is done with the knowledge or approval of the worker's employer. (1D) In proceedings against W's employer in respect of anything alleged to have been done as mentioned in subsection (1A)(a), it is a defence for the employer to show that the employer took all reasonable steps to prevent the other worker— (a) from doing that thing, or (b) from doing anything of that description. (1E) A worker or agent of W's employer is not liable by reason of subsection (1A) for doing something that subjects W to detriment if— (a) the worker or agent does that thing in reliance on a statement by the employer that doing it does not contravene this Act, and (b) it is reasonable for the worker or agent to rely on the statement. But this does not prevent the employer from being liable by reason of subsection (1B).

• (2) In section 48 of that Act (complaints to employment tribunals), in subsection (5)—

• (a) for “includes, where” substitute

includes— (a) where

;

• (b) at the end insert—

(b) in the case of proceedings against a worker or agent under section 47B(1A), the worker or agent.

Extension of meaning of “worker”

20

• (1) Section 43K of the Employment Rights Act 1996 (extension of meaning of “worker”) is amended as set out in subsections (2) to (7).

• (2) In subsection (1)(ba)—

• (a) for “section 84 or 100 of” substitute “ section 83(2), 84, 92, 100, 107, 115(4), 117 or 134 of, or Schedule 12 to, ”;

• (b) for “section 42 or 57 of” substitute “ section 41(2)(b), 42, 50, 57, 64 or 92 of, or Schedule 7 to, ”;

• (c) omit the words after “the National Health Service (Wales) Act 2006”.

• (3) In subsection (1)(bb), after “section 17J” insert “ or 17Q ”.

• (4) In subsection (1)(c)—

• (a) for the words before “in accordance with arrangements” substitute “ works or worked as a person providing services ”;

• (b) in sub-paragraph (ii), after “section” insert “ 2C, 17AA, 17C, ”.

• (5) Omit subsection (1)(ca) and the preceding “or”.

• (6) Omit subsection (2)(ba).

• (7) After subsection (3) insert—

(4) The Secretary of State may by order make amendments to this section as to what individuals count as “workers” for the purposes of this Part (despite not being within the definition in section 230(3)). (5) An order under subsection (4) may not make an amendment that has the effect of removing a category of individual unless the Secretary of State is satisfied that there are no longer any individuals in that category.

• (8) In section 236(3) of that Act (orders etc subject to affirmative resolution procedure), after “shall be made under section” insert “ 43K(4), ”.”

• (9) In consequence of the amendments made by subsections (5) and (6), omit paragraph 7(a)(ii) and (b) of the Schedule to the Smoking, Health and Social Care (Scotland) Act 2005 (Consequential Modifications) (England, Wales and Northern Ireland) Order 2006 (S.I. 2006/1056).

• (10) Until the coming into force of the repeal (made by Schedule 3 to the Smoking, Health and Social Care (Scotland) Act 2005 (asp 13)) of sections 27 to 28 of the National Health Service (Scotland) Act 1978 (“the 1978 Act”), section 43K(1)(c)(ii) of the Employment Rights Act 1996 has effect as if it included a reference to section 27A of the 1978 Act.

Miscellaneous

Tribunal procedure: miscellaneous

21

• (1) The Employment Tribunals Act 1996 is amended as follows.

• (2) In section 9 (pre-hearing reviews and preliminary matters), in subsection (2) (deposit orders), in paragraph (a)—

• (a) omit “, if he wishes to continue to participate in those proceedings,”;

• (b) after “an amount not exceeding £1,000” insert

as a condition of— (i) continuing to participate in those proceedings, or (ii) pursuing any specified allegations or arguments

.

• (3) In section 13A (payments in respect of preparation time)—

• (a) in subsection (3), after “shall also” insert “ , subject to subsection (4), ”;

• (b) after subsection (3) insert—

(4) Subsection (3) does not require the regulations to include provision to prevent an employment tribunal from making— (a) an order of the kind mentioned in subsection (1), and (b) an award of the kind mentioned in section 13(1)(a) that is limited to witnesses' expenses.

• (4) In section 42 (interpretation), in subsection (1), after the definition of “employment tribunal procedure regulations” insert—

“representative” shall be construed in accordance with section 6(1) (in Part 1) or section 29(1) (in Part 2),

.

Indexation of amounts: timing and rounding

22

• (1) Section 34 of the Employment Relations Act 1999 (indexation of amounts, etc) is amended as follows.

• (2) In subsection (2)—

• (a) omit “as soon as practicable”;

• (b) at the end insert “ , with effect from the following 6th April ”.

• (3) In subsection (3), for the words after “the Secretary of State shall” substitute “ round the result to the nearest whole pound, taking 50p as nearest to the next whole pound above ”.

Renaming of “compromise agreements”, “compromise contracts” and “compromises”

23

• (1) In the following provisions, for “compromise” (in each place where it occurs) substitute “ settlement ”

• (a) section 288(2A) and (2B) of the Trade Union and Labour Relations (Consolidation) Act 1992 (restriction on contracting out);

• (b) section 203(2)(f) and (3) of the Employment Rights Act 1996 (restrictions on contracting out);

• (c) section 58(4) and (5) of the Pensions Act 2008 (restrictions on agreements to limit operation of Part 1).

• (2) In section 19A of the Employment Tribunals Act 1996 (conciliation: recovery of sums payable under compromises)—

• (a) in subsections (1), (3), (4), (5) and (6), for “compromise” (in each place where it occurs) substitute “ settlement ”;

• (b) in subsection (12)—

• (i) for “compromise” (in the first two places it occurs) substitute “ settlement ”;

• (ii) omit “, or compromise,”;

• (c) in the heading, for “compromises” substitute “ settlements ”.

• (3) In section 49 of the National Minimum Wage Act 1998 (restrictions on contracting out)—

• (a) in subsections (3) and (4), for “compromise” (in each place where it occurs) substitute “ settlement ”;

• (b) after subsection (8) insert—

(8A) In the application of this section in relation to Northern Ireland, subsections (3) and (4) above shall have effect as if for “settlement agreements” (in each place) there were substituted “compromise agreements.

• (4) In section 28 of the Equality Act 2006 (legal assistance), in subsection (11), for “compromise contract or agreement” substitute “ settlement agreement ”.

• (5) In section 144 of the Equality Act 2010 (contracting out), in subsection (4)(b), for “compromise contract” substitute “ settlement agreement ”.

• (6) In section 147 of that Act (meaning of “qualifying compromise contract”), in subsections (2) and (5) and in the heading, for “compromise contract” substitute “ settlement agreement ”.

General

Transitional provision

24

• (1) Section 10 does not apply in relation to a disclosure, or a request for information, made before that section comes into force.

• (2) Section 12 does not apply in relation to proceedings that are in the process of being heard by the Employment Appeal Tribunal when that section comes into force.

• (3) Section 13 does not apply where the effective date of termination of the contract of employment in question is earlier than the date on which that section comes into force.

“Effective date of termination” here has the meaning given by section 97(1) of the Employment Rights Act 1996.

• (4) Section 14 does not apply to any offer made or discussions held before the commencement of that section.

• (5) Section 16 does not apply in relation to any claim presented before the end of the sixth month after the day on which this Act is passed (or before the commencement of that section).

• (6) Section 17, 18, 19 or 20 does not apply to a qualifying disclosure made before the section comes into force.

“Qualifying disclosure” here has the meaning given by section 43B of the Employment Rights Act 1996.

PART 3 — The Competition and Markets Authority

The Competition and Markets Authority

25

• (1) There is to be a body corporate known as the Competition and Markets Authority.

• (2) In this Part that body is referred to as “the CMA”.

• (3) The CMA must seek to promote competition, both within and outside the United Kingdom, for the benefit of consumers.

• (4) Schedule 4 (which makes provision about the CMA) has effect.

• (5) In making any decision, or otherwise taking action, for the purposes of any of its functions within Schedule 4A the CMA must have regard to the need for making a decision, or taking action, as soon as reasonably practicable.

Abolition of the Competition Commission and the OFT

26

• (1) The Competition Commission is abolished.

• (2) The Office of Fair Trading is abolished.

• (3) Schedule 5 (which amends the Competition Act 1998 and the Enterprise Act 2002 to make provision for the transfer of certain functions from the Competition Commission and the Office of Fair Trading to the CMA and to make other minor and consequential amendments) has effect.

• (4) Schedule 6 (which amends other enactments to make provision for the transfer of certain functions from the Competition Commission and the Office of Fair Trading to the CMA) has effect.

Transfer schemes

27

• (1) The Secretary of State may make one or more transfer schemes in connection with—

• (a) the establishment of the CMA under this Act,

• (b) the transfer of functions under or by virtue of this Act from the Competition Commission or the Office of Fair Trading to the CMA, or

• (c) the abolition of that Commission or that Office under this Act.

• (2) A transfer scheme is a scheme for the transfer of property, rights and liabilities of the Competition Commission or the Office of Fair Trading to—

• (a) the CMA, or

• (b) a Minister of the Crown (as defined by section 8 of the Ministers of the Crown Act 1975).

• (3) The things that may be transferred under a transfer scheme include—

• (a) property, rights and liabilities that could not otherwise be transferred;

• (b) property acquired, and rights and liabilities arising, after the making of the scheme.

• (4) A transfer scheme may make consequential, supplementary, incidental or transitional provision and may in particular—

• (a) create rights, or impose liabilities, in relation to property or rights transferred;

• (b) make provision about the continuing effect of things done by the transferor in respect of anything transferred;

• (c) make provision about the continuation of things (including legal proceedings) in the process of being done by, on behalf of, or in relation to the transferor in respect of anything transferred;

• (d) make provision for references to the transferor in an instrument or other document in respect of anything transferred to be treated as references to the transferee;

• (e) make provision for the shared ownership or use of property;

• (f) make provision that is the same as or similar to the TUPE regulations.

• (5) A transfer scheme may provide—

• (a) for the scheme to be modified by agreement after it comes into effect;

• (b) for modifications to have effect from the date when the scheme first came into effect.

• (6) For the purposes of this section—

• (a) an individual who holds employment in the civil service is to be treated as employed by virtue of a contract of employment, and

• (b) the terms of the individual's employment in the civil service are to be regarded as constituting the terms of the contract of employment.

• (7) In this section—

• “civil service” means the civil service of the State;

• “TUPE regulations” means the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246);

• references to rights and liabilities include rights and liabilities relating to a contract of employment;

• references to the transfer of property include references to the grant of a lease.

Transitional provision: consultation

28

• (1) This section applies in relation to a provision of this Act under or by virtue of which the CMA has a function of consulting another person in preparing rules, statements of policy, guidance or general advice or information.

• (2) At any time before the provision comes into force, the Office of Fair Trading or the Competition Commission or both bodies acting jointly—

• (a) may carry out any consultation that the CMA would have power to carry out after the provision comes into force, and

• (b) for that purpose, may prepare drafts of any documents to which the consultation relates.

• (3) At any time after the provision comes into force, the CMA may elect to treat any consultation carried out or other thing done under subsection (2) by the Office of Fair Trading or the Competition Commission (or by both bodies acting jointly) as carried out or done by the CMA.

• (4) The Secretary of State may direct the Office of Fair Trading or the Competition Commission, or both of them acting jointly, to exercise a power conferred by subsection (2).

PART 4 — Competition Reform

CHAPTER 1 — Mergers

Investigation powers

Investigation powers: mergers

29

• (1) Section 109 of the Enterprise Act 2002 (“the 2002 Act”) (investigation powers in connection with attendance of witnesses etc.) is amended as follows.

• (2) Before subsection (1) insert—

(A1) For the purposes of this section, the permitted purposes are the following— (a) assisting the CMA in carrying out any functions, including enforcement functions, exercisable by it under or by virtue of this Part in connection with a matter that is or has been the subject of a reference or possible reference under section 22 or 33; (b) assisting the CMA or the Secretary of State in carrying out any functions, including enforcement functions, of the CMA or (as the case may be) the Secretary of State under or by virtue of this Part in connection with a matter that is or has been the subject of a reference or possible reference under section 45 or 62.

• (3) In subsection (1), for the words from the beginning to “under this Part,” substitute “ The CMA may, for a permitted purpose, ”.

• (4) In subsection (2), for the words from the beginning to “under this Part,” substitute “ The CMA may, for a permitted purpose, ”.

• (5) In subsection (3), for the words from the beginning to “under this Part,” substitute “ The CMA may, for a permitted purpose, ”.

• (6) In subsection (4), after “shall” insert

— (a) specify the permitted purpose for which the notice is given, including the function or functions in question; and (b)

.

• (7) In subsection (5), for the words from the beginning to “under this Part,” substitute “ The CMA, or any person nominated by it for the purpose, may for a permitted purpose ”.

• (8) In subsection (6), for the words from “for the purpose of” to “under this Part” substitute “ for a permitted purpose ”.

• (9) After subsection (8) insert—

(8A) In subsection (A1), “enforcement functions” means— (a) in relation to the CMA— (i) functions conferred by virtue of section 87 on the CMA by enforcement orders; (ii) functions of the CMA in relation to the variation, supersession or release of enforcement undertakings or the variation or revocation of enforcement orders; (iii) functions of the CMA under or by virtue of section 75, 76, 83 or 92 in relation to enforcement undertakings or enforcement orders; (b) in relation to the Secretary of State— (i) functions conferred by virtue of section 87 on the Secretary of State by enforcement orders; (ii) functions of the Secretary of State in relation to the variation, supersession or release of enforcement undertakings or the variation or revocation of enforcement orders; (iii) functions of the Secretary of State under or by virtue of paragraph 5, 6 or 10 of Schedule 7 in relation to enforcement undertakings or enforcement orders.

• (10) In section 110 (enforcement of powers under section 109: general), omit subsection (4).

• (11) After section 110 insert—

(110A) (1) No penalty shall be imposed by virtue of section 110(1) or (3) if more than 4 weeks have passed since the day which is the relevant day in the case in question; but this subsection shall not apply in relation to any variation or substitution of the penalty which is permitted by virtue of this Part. (2) In the following provisions of this section, “the section 109 power” means the power under section 109 to which the failure or (as the case may be) the obstruction or delay in question relates. (3) Where the section 109 power is exercised in connection with an enforcement function (within the meaning of that section), the relevant day is the day when the enforcement undertaking concerned is superseded or released or (as the case may be) the enforcement order concerned is revoked. (4) Except where subsection (3) applies, the relevant day is the day determined in accordance with the following provisions of this section. (5) Where the section 109 power is exercised for the purpose mentioned in section 109(A1)(a) in connection with a matter that is the subject of a possible reference under section 22 or 33, the relevant day is the day when the CMA finally decides whether to make the reference. (6) Where the section 109 power is exercised for the purpose mentioned in section 109(A1)(a) in connection with a matter that is the subject of a reference under section 22 or 33, the relevant day is the day when the reference is finally determined (see section 79). (7) Where the section 109 power is exercised for the purpose mentioned in section 109(A1)(b) in connection with a matter that is the subject of a possible reference under section 45 or 62, the relevant day is the day when the Secretary of State finally decides whether to make the reference. (8) Where the section 109 power is exercised for the purpose mentioned in section 109(A1)(b) in connection with a matter that is the subject of a reference under section 45 or 62, the relevant day is the day when the reference is finally determined. (110B) (1) For the purpose of section 110A(5), the CMA finally decides whether to make a reference under section 22 or 33 if— (a) the CMA decides that the duty to make such a reference applies; (b) the CMA accepts an undertaking under section 73; (c) the CMA decides not to make such a reference (otherwise than because it has accepted an undertaking under section 73); (d) the initial period for the purposes of section 34ZA expires without the CMA having complied with the duty under subsection (1) of that section; (e) the preliminary assessment period for the purposes of section 34A expires without the CMA having complied with the duty under subsection (2) of that section; (f) the period permitted by section 73A for the CMA to make a decision required by subsection (2)(a) or (3) of that section expires without the CMA having made the decision. (2) For the purpose of section 110A(5), the time when the CMA finally decides whether to make a reference under section 22 or 33 is— (a) in a case falling within subsection (1)(a), the making of the decision that the duty to make such a reference applies; (b) in a case falling within subsection (1)(b), the acceptance of the undertaking; (c) in a case falling within subsection (1)(c), the making of the decision not to make the reference; (d) in a case falling within subsection (1)(d), the expiry of the initial period; (e) in a case falling within subsection (1)(e), the expiry of the preliminary assessment period; (f) in a case falling within subsection (1)(f), the expiry of the period in question. (3) For the purpose of section 110A(7), the Secretary of State finally decides whether to make a reference under section 45 or 62 if— (a) the Secretary of State makes such a reference; (b) the Secretary of State accepts an undertaking under paragraph 3 of Schedule 7; (c) the Secretary of State decides not to make such a reference (otherwise than because of the acceptance of an undertaking under paragraph 3 of Schedule 7); (d) the preliminary assessment period for the purposes of section 46A expires without the CMA having complied with the duty under subsection (2) of that section. (4) For the purpose of section 110A(7), the time when the Secretary of State finally decides whether to make a reference under section 45 or 62 is— (a) in a case falling within subsection (3)(a), the making of the reference; (b) in a case falling within subsection (3)(b), the acceptance of the undertaking; (c) in a case falling within subsection (3)(c), the making of the decision not to make the reference; (d) in a case falling within subsection (3)(d), the expiry of the preliminary assessment period. (5) Paragraph 7(8) to (10) of Schedule 7 applies for deciding if and when a reference under section 45(2) or (3) or 62(2) is finally determined for the purpose of section 110A(8) as it applies for deciding those questions for the purpose of paragraph 7 of Schedule 7. (6) Paragraph 8(7) to (9) of Schedule 7 applies for deciding if and when a reference under section 45(4) or (5) or 62(3) is finally determined for the purpose of section 110A(8) as it applies for deciding those questions for the purpose of the definition of “relevant period” in paragraph 8(6) of that Schedule.

• (12) In section 111 (penalties), in subsection (5)(b)—

• (a) in sub-paragraph (i), omit “or (as the case may be) the obstruction or delay is removed”, and

• (b) in sub-paragraph (ii), for the words from “the day” to the end of the sub-paragraph substitute “ the day which is the relevant day in the case in question for the purposes of section 110A ”.

Interim measures

Interim measures: pre-emptive action: mergers

30

• (1) Omit section 71 of the 2002 Act (initial undertakings: completed mergers).

• (2) Section 72 of that Act (initial enforcement orders: completed mergers) is amended as follows.

• (3) For subsection (1) substitute—

(1) Subsection (2) applies where— (a) the CMA is considering whether to make a reference under section 22 or 33; and (b) the CMA has reasonable grounds for suspecting that it is or may be the case that two or more enterprises have ceased to be distinct or that arrangements are in progress or in contemplation which, if carried into effect, will result in two or more enterprises ceasing to be distinct.

• (4) Omit subsection (3).

• (5) Before subsection (4) insert—

(3A) Subsection (3B) applies where— (a) subsection (1)(a) and (b) applies; and (b) the CMA also has reasonable grounds for suspecting that pre-emptive action has or may have been taken. (3B) The CMA may by order, for the purpose of restoring the position to what it would have been had the pre-emptive action not been taken or otherwise for the purpose of mitigating its effects— (a) do anything mentioned in subsection (2)(b) to (d); (b) impose such other obligations, prohibitions or restrictions as it considers appropriate for that purpose.

• (6) After subsection (3B) insert—

(3C) A person may, with the consent of the CMA, take action or action of a particular description where the action would otherwise constitute a contravention of an order under this section.

• (7) In subsection (6), in each of paragraphs (a) and (d), after “section 22” insert “ or 33 ”.

• (8) After subsection (7) insert—

(8) In this section “pre-emptive action” means action which might prejudice the reference concerned or impede the taking of any action under this Part which may be justified by the CMA's decisions on the reference.

• (9) In the heading for “completed mergers” substitute “ completed or anticipated mergers ”.

• (10) Schedule 7 (which makes further provision about interim measures under Part 3 of the 2002 Act) has effect.

Interim measures: financial penalties: mergers

31

• (1) After section 94 of the 2002 Act (rights to enforce undertakings and orders under Part 3) insert—

(94A) (1) Where the appropriate authority considers that a person has, without reasonable excuse, failed to comply with an interim measure, it may impose a penalty of such fixed amount as it considers appropriate. (2) A penalty imposed under subsection (1) shall not exceed 5% of the total value of the turnover (both in and outside the United Kingdom) of the enterprises owned or controlled by the person on whom it is imposed. (3) For the purposes of subsection (2), the Secretary of State may by order make provision for determining— (a) when an enterprise is to be treated as controlled by a person; and (b) the turnover (both in and outside the United Kingdom) of an enterprise. (4) An order under subsection (3)(b) may, in particular, make provision as to— (a) the amounts which are, or which are not, to be treated as comprising an enterprise's turnover; (b) the date or dates by reference to which an enterprise's turnover is to be determined. (5) An order under subsection (3) may, in particular, make provision enabling the appropriate authority to determine matters of a description specified in the order (including any of the matters mentioned in paragraphs (a) and (b) of subsection (4)). (6) The Secretary of State may by order amend subsection (2) so as to alter the percentage for the time being mentioned there to any percentage not exceeding 5%. (7) Sections 112 to 115 apply in relation to a penalty imposed under subsection (1) as they apply in relation to a penalty of a fixed amount imposed under section 110(1), with the modification that any reference in those provisions to the CMA is to be read as a reference to the person who imposed the penalty under this section. (8) In this section— - “interim measure” means— 1. an undertaking under section 80; or 2. an order under section 72 or 81 or paragraph 2 of Schedule 7; - “appropriate authority” means— 1. in relation to an interim measure which is an order made by the Secretary of State under paragraph 2 of Schedule 7, the Secretary of State; 2. in relation to any other interim measure, the CMA. (94B) (1) The CMA shall prepare and publish a statement of policy in relation to the use of its powers under— (a) section 94, insofar as they relate to interim measures; and (b) section 94A. (2) The CMA shall, in particular, include a statement about the considerations relevant to the determination of the amount of any penalty imposed under section 94A. (3) The CMA may revise its statement of policy and, where it does so, it shall publish the revised statement. (4) The CMA shall consult the Secretary of State and such other persons as it considers appropriate when preparing or revising its statement of policy. (5) A statement or revised statement of policy may not be published under this section unless the Secretary of State approves the statement. (6) In this section, “interim measure” has the same meaning as in section 94A.

• (2) In section 120 of that Act (review of decisions under Part 3), in subsection (2)(a), for “section 110(1) or (3)” substitute “ section 94A(1) or 110(1) or (3) ”.

• (3) In section 124 of that Act (orders and regulations under Part 3)—

• (a) in subsection (4), before “or 102” insert “ , 94A(6) ”, and

• (b) in subsection (5), before “111(4) or (6),” insert “ 94A(3) or (6), ”.

Time-limits

Time-limits etc: mergers

32

• (1) In section 103 of the 2002 Act (duty of expedition in relation to references), in subsection (1), for the words from the beginning to “the OFT” substitute “ In making any decision for the purposes of its functions of making and determining references under this Part, the CMA ”.

• (2) Schedule 8 (which makes provision about time-limits in relation to the mergers reference regime under Part 3 of the 2002 Act) has effect.

CHAPTER 2 — Markets

Cross-market investigations

Power of CMA to make cross-market references

33

• (1) Section 131 of the 2002 Act (power to make market investigation references) is amended as follows.

• (2) After subsection (2) insert—

(2A) In a case where the feature or each of the features concerned falls within subsection (2)(b) or (c), a reference under subsection (1) may be made in relation to more than one market in the United Kingdom for goods or services.

• (3) In subsection (4)(a), for “section 156(1)” substitute “ section 156(A1) or (1) ”.

• (4) In subsection (6)—

• (a) before the definition of “market in the United Kingdom” insert—

“cross-market reference” means a reference under this section which falls within subsection (2A) or a reference under section 132 which falls within subsection (3A) of that section (and see section 140A);

, and

• (b) after the definition of “market investigation reference” insert—

“ordinary reference” means a reference under this section or section 132 which is not a cross-market reference (and see section 140A);

.

Ministerial power to make cross-market references

34

• (1) Section 132 of the 2002 Act (ministerial power to make market investigation references) is amended as follows.

• (2) After subsection (3) insert—

(3A) In a case where the feature or each of the features concerned falls within section 131(2)(b) or (c), a reference under subsection (3) may be made in relation to more than one market in the United Kingdom for goods or services.

• (3) In subsection (4), for “section 156(1)” substitute “ section 156(A1) or (1) ”.

• (4) Schedule 9 (which contains amendments of Part 4 of the 2002 Act which are consequential on section 33 and this section) has effect.

Public interest interventions

Public interest interventions in markets investigations

35

• (1) Part 4 of the 2002 Act (market investigations) is amended as follows.

• (2) Section 139 (power of Secretary of State to give public interest intervention notices) is amended as follows.

• (3) For subsection (1) substitute—

(A1) This section applies where— (a) the CMA has published a market study notice in relation to a matter; or (b) the CMA has begun the process of consultation under section 169 in respect of a decision of the kind mentioned in subsection (6)(a)(i) of that section. (1) The Secretary of State may, within the permitted period, give a notice to the CMA if the Secretary of State believes that it is or may be the case that one or more than one public interest consideration is relevant to the matter. (1A) For the purposes of subsection (1), the permitted period, in a case to which this section applies by virtue of paragraph (a) of subsection (A1), is the period beginning with the publication of the market study notice and ending with— (a) the acceptance by the CMA of an undertaking under section 154 instead of the making of a reference under section 131 in relation to the matter; (b) the publication of notice of the fact that the CMA has otherwise decided not to make such a reference in relation to the matter; (c) the making of such a reference in relation to the matter; or (d) in a case where the period permitted by section 131B for the preparation and publication by the CMA of the market study report in relation to the matter has expired and no such report has been prepared or published, the end of that period. (1B) For the purposes of subsection (1), the permitted period, in a case to which this section applies by virtue of paragraph (b) of subsection (A1), is the period beginning with the date on which the CMA begins the process of consultation concerned and ending with— (a) the acceptance by the CMA of an undertaking under section 154 instead of the making of a reference under section 131 in relation to the matter concerned; (b) the publication of notice of the fact that the CMA has otherwise decided not to make such a reference in relation to the matter; or (c) the making of such a reference in relation to the matter.

• (4) In subsection (2)—

• (a) in the words before paragraph (a), after “may” insert “ , within the permitted period, ”,

• (b) in paragraph (a)(i), after “131” insert “ in relation to the matter ”, and

• (c) in paragraph (c), for “case” (in the second place where it occurs) substitute “ proposal to accept the undertaking ”.

• (5) After subsection (2) insert—

(2A) For the purposes of subsection (2), the permitted period is— (a) where the CMA publishes a notice under section 155(1), the period within which representations may be made in relation to the proposed undertaking (as to which, see section 155(2)(f)); (b) where the CMA publishes a notice under section 155(4), the period within which representations may be made in relation to the proposed modifications to the proposed undertaking (as to which, see section 155(5)(c)).

• (6) For subsection (4) substitute—

(4) No more than one intervention notice shall be given under subsection (1) in relation to the same matter. (4A) An intervention notice shall not be given under subsection (2) in relation to a proposal to accept an undertaking if the proposal relates to a matter in respect of which an intervention notice under subsection (1) has already been given. (4B) No more than one intervention notice shall be given under subsection (2) in relation to the same proposed undertaking or in relation to proposed undertakings which do not differ from each other in any material respect.

• (7) After subsection (4B) insert—

(4C) In this section, a reference to the acceptance of an undertaking shall, in a case where the CMA has accepted a group of undertakings under section 154, be treated as a reference to the acceptance of the last undertaking in the group; but undertakings which vary, supersede or revoke earlier undertakings shall be disregarded for the purposes of this section.

• (8) After section 140 insert—

(140A) (1) This section applies where— (a) the CMA has prepared a market study report in relation to a matter within the period permitted by section 131B(4); (b) an intervention notice under section 139(1) is in force in relation to the matter at the time when the CMA would (but for this section) be required to publish the report; and (c) the report contains the decision of the CMA that it should make an ordinary reference or a cross-market reference in relation to the matter under section 131. (2) This section also applies where— (a) the CMA has conducted a consultation under section 169 in respect of a decision of the kind mentioned in subsection (6)(a)(i) of that section; (b) the CMA has decided that it should make an ordinary reference or a cross-market reference in relation to the matter concerned under section 131; and (c) an intervention notice under section 139(1) is in force in relation to the matter at the time when the CMA makes that decision. (3) The CMA— (a) shall not exercise the power under section 131 to refer the matter; (b) in a case falling within subsection (1), shall not publish the market study report under section 131B(4) and shall instead, within the period mentioned in section 131B(4), give the report to the Secretary of State; and (c) in a case falling within subsection (2), shall give to the Secretary of State a document containing— (i) its decision and the reasons for its decision; and (ii) such information as the CMA considers appropriate for facilitating a proper understanding of the reasons for its decision. (4) The Secretary of State shall decide whether any public interest consideration which was mentioned in the intervention notice is relevant to the matter in question. (5) Where the Secretary of State decides that there is no relevant public interest consideration— (a) the Secretary of State shall (in accordance with the CMA's decision) make a reference in relation to the matter to the chair of the CMA for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013; and (b) the reference is to be treated for the purposes of this Part as an ordinary reference or (as the case may be) a cross-market reference made under section 131 in accordance with the requirements imposed by this Part. (6) Where the Secretary of State decides that there is one or more than one relevant public interest consideration, the Secretary of State shall (in accordance with the CMA's decision) make a reference in relation to the matter to the chair of the CMA for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013. (7) The Secretary of State shall specify in a reference made under subsection (6)— (a) the relevant public interest consideration or considerations; and (b) whether the reference is a restricted PI reference or a full PI reference (as to which, see sections 141 and 141A respectively). (8) Where the Secretary of State makes a full PI reference under subsection (6), the reference shall also specify whether the Secretary of State proposes to appoint a public interest expert under section 141B. (9) For the purposes of this Part, a reference under subsection (6) is to be treated— (a) in a case where the decision of the CMA was that it should make an ordinary reference, as an ordinary reference; (b) in a case where the decision of the CMA was that it should make a cross-market reference, as a cross-market reference. (10) In a case falling within subsection (1), the Secretary of State shall publish the market study report concerned at the same time as the Secretary of State makes a reference under this section. (11) In a case falling within subsection (2), the Secretary of State shall publish the document given to the Secretary of State by the CMA under subsection (3)(c), at the same time as the Secretary of State makes a reference under this section. (12) In this Part— - “full PI reference” means a reference made by the Secretary of State under subsection (6) which specifies that it is a full PI reference; - “restricted PI reference” means a reference made by the Secretary of State under subsection (6) which specifies that it is a restricted PI reference.

• (9) After section 141 insert—

(141A) (1) This section applies where the Secretary of State makes a full PI reference. (2) The CMA shall, on an ordinary reference, decide whether any feature, or combination of features, of each relevant market (within the meaning given by section 134(3)) prevents, restricts or distorts competition in connection with the supply or acquisition of any goods or services in the United Kingdom or a part of the United Kingdom. (3) The CMA shall, on a cross-market reference, decide in relation to each feature and each combination of the features specified in the reference, whether the feature or combination of features, as it relates to goods or services of one or more than one of the descriptions so specified, prevents, restricts or distorts competition in connection with the supply or acquisition of any goods or services in the United Kingdom or a part of the United Kingdom. (4) The CMA shall, if it has decided that there is an adverse effect on competition, decide whether, taking account only of any adverse effect on competition and the admissible public interest consideration or considerations concerned, any feature or combination of features which gave rise to an adverse effect on competition operates or may be expected to operate against the public interest. (5) The CMA shall, if it has decided that any such feature or combination of features operates or may be expected to operate against the public interest, also decide separately the following additional questions— (a) whether action should be taken by the Secretary of State under section 147A for the purpose of remedying, mitigating or preventing any of the effects adverse to the public interest concerned; (b) whether the CMA should recommend the taking of other action by the Secretary of State, or action by persons other than itself and the Secretary of State, for the purpose of remedying, mitigating or preventing any of the effects adverse to the public interest concerned; and (c) in either case, if action should be taken, what action should be taken and what is to be remedied, mitigated or prevented. (6) The CMA shall, if it has decided that there is an adverse effect on competition, also decide separately the following questions (on the assumption that it is proceeding as mentioned in section 148A(2))— (a) whether action should be taken by it under section 138 for the purpose of remedying, mitigating or preventing the adverse effect on competition concerned or any detrimental effect on customers so far as it has resulted from, or may be expected to result from, the adverse effect on competition; (b) whether the CMA should recommend the taking of action by other persons for the purpose of remedying, mitigating or preventing the adverse effect on competition concerned or any detrimental effect on customers so far as it has resulted from, or may be expected to result from, the adverse effect on competition; and (c) in either case, if action should be taken, what action should be taken and what is to be remedied, mitigated or prevented. (7) In a case where the Secretary of State has appointed a public interest expert under section 141B in relation to a full PI reference, the CMA shall, in deciding the questions mentioned in subsections (4) and (5), have regard, in particular, to the views of the expert. (8) In deciding the questions mentioned in subsection (5), the CMA shall, in particular, have regard to— (a) the need to achieve as comprehensive a solution as is reasonable and practicable to the effects adverse to the public interest concerned; and (b) any detrimental effects on customers so far as resulting from those effects. (9) In deciding the questions mentioned in subsection (6), the CMA shall, in particular, have regard to— (a) the need to achieve as comprehensive a solution as is reasonable and practicable to the adverse effect on competition concerned; and (b) any detrimental effects on customers so far as resulting from it. (10) In deciding the questions mentioned in subsections (5) and (6), the CMA may, in particular, have regard to the effect of any action on any relevant customer benefits of the feature or features of the market or markets concerned. (11) In this section, “admissible public interest consideration” means any public interest consideration specified in the reference concerned and which the CMA is not under a duty to disregard. (141B) (1) This section applies where the Secretary of State makes a full PI reference. (2) The Secretary of State may appoint one or more than one person to advise the CMA on the questions mentioned in subsections (4) and (5) of section 141A in relation to the reference. (3) A person so appointed shall be a person who appears to the Secretary of State to have particular knowledge of, or expertise in, matters relating to a public interest consideration specified in the reference. (4) Each person so appointed is referred to in this Part as a “public interest expert”. (5) The terms and conditions of appointment of a public interest expert (including, in particular, as to remuneration) are to be determined by the Secretary of State. (6) Any appointment of a public interest expert under this section shall be made within the period of 2 months beginning with the date of the reference concerned. (7) Before appointing a public interest expert the Secretary of State shall consult the chair of the CMA.

• (10) Schedule 10 (which contains amendments of Part 4 of the 2002 Act which are consequential on or otherwise related to this section) has effect.

Investigation powers

Investigation powers: markets

36

• (1) Section 174 of the 2002 Act (investigation powers) is amended as follows.

• (2) For subsections (1) and (2) substitute—

(1) For the purposes of this section, the permitted purposes are the following— (a) assisting the CMA in carrying out its functions under section 5 in relation to a matter in a case where it has published a market study notice; (b) assisting the CMA in carrying out any functions, including enforcement functions, exercisable by it under or by virtue of this Part in connection with a matter that is or has been the subject of a reference under section 131 or 132 or possible reference under section 131; (c) assisting the CMA or the Secretary of State in carrying out any functions, including enforcement functions, of the CMA or (as the case may be) the Secretary of State under or by virtue of this Part in connection with a matter that is or has been the subject of a reference under section 140A(6) or possible reference under section 140A(5) or (6). (2) The CMA may exercise any of the powers in subsections (3) to (5) for a permitted purpose.

• (3) In subsection (6), after “shall” insert

— (a) specify the permitted purpose for which the notice is given, including the function or functions in question; and (b)

.

• (4) After subsection (6) insert—

(6A) The CMA or any person nominated by it for the purpose may, for a permitted purpose, take evidence on oath and for that purpose may administer oaths.

• (5) In subsection (7), for “the purpose mentioned in subsection (1)” substitute “ a permitted purpose ”.

• (6) After subsection (9) insert—

(9A) In subsection (1), “enforcement functions” means— (a) in relation to the CMA— (i) functions conferred by virtue of section 164(2)(b) on the CMA by enforcement orders; (ii) functions of the CMA in relation to the variation, supersession or release of enforcement undertakings or the variation or revocation of enforcement orders; (iii) functions of the CMA under or by virtue of section 160 or 162 in relation to enforcement undertakings or enforcement orders; (b) in relation to the Secretary of State— (i) functions conferred by virtue of section 164(2)(b) on the Secretary of State by enforcement orders; (ii) functions of the Secretary of State in relation to the variation, supersession or release of enforcement undertakings or the variation or revocation of enforcement orders; (iii) functions of the Secretary of State under or by virtue of section 160 in relation to enforcement undertakings or enforcement orders.

• (7) For the heading substitute “ Attendance of witnesses and production of documents etc. ”.

• (8) Schedule 11 (which makes provision about the enforcement of the powers under section 174 of the 2002 Act, as amended by this section, and which makes consequential amendments of that Act) has effect.

Interim measures

Interim measures: pre-emptive action: markets

37

• (1) Part 4 of the 2002 Act (market investigations) is amended as follows.

• (2) In section 157 (interim undertakings: Part 4), after subsection (2) insert—

(2A) Subsection (2B) applies where— (a) subsection (1)(a) to (c) applies; and (b) the relevant authority has reasonable grounds for suspecting that pre-emptive action has or may have been taken. (2B) The relevant authority may, for the purpose of restoring the position to what it would have been had the pre-emptive action not been taken or otherwise for the purpose of mitigating its effects, accept, from such persons as the relevant authority considers appropriate, undertakings to take such action as the relevant authority considers appropriate.

• (3) After subsection (2B) of that section insert—

(2C) A person may, with the consent of the relevant authority, take action of a particular description where the action would otherwise constitute a contravention of an undertaking accepted under this section.

• (4) In section 158 (interim orders: Part 4), after subsection (2) insert—

(2A) Subsection (2B) applies where— (a) subsection (1)(a) to (c) applies; and (b) the relevant authority has reasonable grounds for suspecting that pre-emptive action has or may have been taken. (2B) The relevant authority may by order, for the purpose of restoring the position to what it would have been had the pre-emptive action not been taken or otherwise for the purpose of mitigating its effects— (a) do anything mentioned in subsection (2)(b) to (d); (b) impose such other obligations, prohibitions or restrictions as it considers appropriate for that purpose.

• (5) After subsection (2B) of that section insert—

(2C) A person may, with the consent of the relevant authority, take action of a particular description where the action would otherwise constitute a contravention of an order under this section.

Time-limits and procedure

Market studies and market investigations: consultation and time-limits

38

Schedule 12 (which makes provision about consultation in relation to decisions whether to make a market investigation reference and about time-limits in relation to the conduct of market studies and the markets investigation reference regime under Part 4 of the 2002 Act) has effect.

CHAPTER 3 — Anti-trust

Investigation powers

Investigations: power to ask questions

39

• (1) Part 1 of the Competition Act 1998 (“the 1998 Act”) (competition) is amended as follows.

• (2) After section 26 (powers when conducting investigations) insert—

(26A) (1) For the purposes of an investigation, the CMA may give notice to an individual who has a connection with a relevant undertaking requiring the individual to answer questions with respect to any matter relevant to the investigation— (a) at a place specified in the notice, and (b) either at a time so specified or on receipt of the notice. (2) The CMA must give a copy of the notice under subsection (1) to each relevant undertaking with which the individual has a current connection at the time the notice is given to the individual. (3) The CMA must take such steps as are reasonable in all the circumstances to comply with the requirement under subsection (2) before the time at which the individual is required to answer questions. (4) Where the CMA does not comply with the requirement under subsection (2) before the time mentioned in subsection (3), it must comply with that requirement as soon as practicable after that time. (5) A notice under subsection (1) must be in writing and must indicate— (a) the subject matter and purpose of the investigation, and (b) the nature of the offence created by section 44. (6) For the purposes of this section— (a) an individual has a connection with an undertaking if he or she is or was— (i) concerned in the management or control of the undertaking, or (ii) employed by, or otherwise working for, the undertaking, and (b) an individual has a current connection with an undertaking if, at the time in question, he or she is so concerned, is so employed or is so otherwise working. (7) In this section, a “relevant undertaking” means an undertaking whose activities are being investigated as part of the investigation in question.

• (3) For the heading of section 26 substitute “ Investigations: powers to require documents and information ”.

• (4) Section 30A (use of statements in prosecution) is amended as follows.

• (5) The existing text becomes subsection (1).

• (6) In subsection (1), for “26 to 28A” substitute “ 26 and 27 to 28A ”.

• (7) After that subsection insert—

(2) A statement by an individual in response to a requirement imposed by virtue of section 26A (a “section 26A statement”) may only be used in evidence against the individual— (a) on a prosecution for an offence under section 44, or (b) on a prosecution for some other offence in a case falling within subsection (3). (3) A prosecution falls within this subsection if, in the proceedings— (a) in giving evidence, the individual makes a statement inconsistent with the section 26A statement, and (b) evidence relating to the section 26A statement is adduced, or a question relating to it is asked, by or on behalf of the individual. (4) A section 26A statement may not be used in evidence against an undertaking with which the individual who gave the statement has a connection on a prosecution for an offence unless the prosecution is for an offence under section 44. (5) For the purposes of subsection (4), an individual has a connection with an undertaking if he or she is or was— (a) concerned in the management or control of the undertaking, or (b) employed by, or otherwise working for, the undertaking.

Civil enforcement of investigation powers

40

• (1) Part 1 of the 1998 Act (competition) is amended as follows.

• (2) After section 40 insert—

(40A) (1) Where the CMA considers that a person has, without reasonable excuse, failed to comply with a requirement imposed on the person under section 26, 26A, 27, 28 or 28A, it may impose a penalty of such amount as it considers appropriate. (2) The amount may be— (a) a fixed amount, (b) an amount calculated by reference to a daily rate, or (c) a combination of a fixed amount and an amount calculated by reference to a daily rate. (3) A penalty imposed under subsection (1) must not— (a) in the case of a fixed amount, exceed such amount as the Secretary of State may by order specify; (b) in the case of an amount calculated by reference to a daily rate, exceed such amount per day as the Secretary of State may so specify; (c) in the case of a fixed amount and an amount calculated by reference to a daily rate, exceed such fixed amount and such amount per day as the Secretary of State may so specify. (4) The fixed amount specified for the purposes of subsection (3)(a) or (c) may not exceed £30,000. (5) The amount per day specified for the purposes of subsection (3)(b) or (c) may not exceed £15,000. (6) In imposing a penalty by reference to a daily rate— (a) no account is to be taken of any days before the service of the notice under section 112 of the Enterprise Act 2002 (as applied by subsection (9)) on the person concerned, and (b) unless the CMA determines an earlier date (whether before or after the penalty is imposed), the amount payable ceases to accumulate at the beginning of the earliest of the days mentioned in subsection (7). (7) The days are— (a) the day on which the requirement concerned is satisfied; (b) the day on which the CMA makes a decision (within the meaning given by section 31(2)) or terminates the investigation in question without making such a decision; (c) if the Secretary of State has made an order under section 31F(1)(b) imposing a time-limit on the making of such a decision, the latest day on which such a decision may be made as a result of the investigation in question. (8) Before making an order under subsection (3), the Secretary of State must consult the CMA and such other persons as the Secretary of State considers appropriate. (9) Sections 112 to 115 of the Enterprise Act 2002 (supplementary provisions about penalties) apply in relation to a penalty imposed under subsection (1) as they apply in relation to a penalty imposed under section 110(1) of that Act. (40B) (1) The CMA must prepare and publish a statement of policy in relation to the use of its powers under section 40A. (2) The CMA must, in particular, include a statement about the considerations relevant to the determination of the nature and amount of any penalty imposed under section 40A. (3) The CMA may revise its statement of policy and, where it does so, it must publish the revised statement. (4) The CMA must consult such persons as it considers appropriate when preparing or revising its statement of policy. (5) If the proposed statement of policy or revision relates to a matter in respect of which a regulator exercises concurrent jurisdiction, those consulted must include that regulator. (6) In deciding whether and, if so, how to proceed under section 40A, the CMA must have regard to the statement of policy which was most recently published under this section at the time when the failure concerned occurred.

• (3) Section 38 (guidance about appropriate level of penalties under section 36) is amended as follows.

• (4) In subsection (1), after “under this Part” insert “ in respect of an infringement of the Chapter 1 prohibition, the Chapter 2 prohibition, the prohibition in Article 81(1) or the prohibition in Article 82 ”.

• (5) In subsection (1A), for “a penalty under this Part” substitute “ such a penalty ”.

• (6) In subsection (8), after “under this Part” insert “ in respect of an infringement of a kind mentioned in subsection (1) ”.

• (7) Section 42 (offences of failure to comply with requirements imposed in investigations and obstruction) is amended as follows.

• (8) Omit subsections (1) to (4).

• (9) In subsection (6), omit “(1) or”.

Extension of powers to issue warrants to CAT

41

Schedule 13 (which amends the 1998 Act to extend the powers under that Act to issue warrants to the Competition Appeal Tribunal) has effect.

Part 1 of the 1998 Act: procedural matters

42

• (1) Part 1 of the 1998 Act (competition) is amended as follows.

• (2) After section 25 (power to investigate) insert—

(25A) (1) Where the CMA decides to conduct an investigation it may publish a notice which may, in particular— (a) state its decision to do so; (b) indicate which of subsections (2) to (7) of section 25 the investigation falls under; (c) summarise the matter being investigated; (d) identify any undertaking whose activities are being investigated as part of the investigation; (e) identify the market which is or was affected by the matter being investigated. (2) Section 57 does not apply to a notice under subsection (1) to the extent that it includes information other than information mentioned in that subsection. (3) Subsection (4) applies if— (a) the CMA has published a notice under subsection (1) which identifies an undertaking whose activities are being investigated, and (b) the CMA subsequently decides (without making a decision within the meaning given by section 31(2)) to terminate the investigation of the activities of the undertaking so identified. (4) The CMA must publish a notice stating that the activities of the undertaking in question are no longer being investigated.

• (3) Schedule 9 (examples of provision that may be made in rules) is amended as follows.

• (4) After paragraph 1 insert—

(1A) (1) Rules may provide for the exercise of a function of the CMA under this Part on its behalf— (a) by one or more members of the CMA Board (see Part 2 of Schedule 4 to the Enterprise and Regulatory Reform Act 2013); (b) by one or more members of the CMA panel (see Part 3 of that Schedule to that Act); (c) by one or more members of staff of the CMA; (d) jointly by one or more of the persons mentioned in paragraph (a), (b) or (c). (2) Sub-paragraph (1) does not apply in relation to any function prescribed in regulations made under section 7(1) of the Civil Aviation Act 1982 (power for Secretary of State to prescribe certain functions of the Civil Aviation Authority which must not be performed on its behalf by any other person).

• (5) After paragraph 13 insert—

(13A) (1) Rules may make provision as to the procedure to be followed by the CMA in holding oral hearings as part of an investigation. (2) Rules may, in particular, make provision as to the appointment of a person mentioned in sub-paragraph (3) who has not been involved in the investigation in question to— (a) chair an oral hearing, and (b) prepare a report following the hearing and give it to the person who is to exercise on behalf of the CMA its function of making a decision (within the meaning given by section 31(2)) as a result of the investigation. (3) The persons are— (a) a member of the CMA Board; (b) a member of the CMA panel; (c) a member of staff of the CMA. (4) The report must— (a) contain an assessment of the fairness of the procedure followed in holding the oral hearing, and (b) identify any other concerns about the fairness of the procedure followed in the investigation which have been brought to the attention of the person preparing the report.

• (6) After paragraph 13A insert—

(13B) (1) Rules may make provision as to arrangements to be made by the CMA for dealing with complaints about the conduct by the CMA of an investigation. (2) Rules may, in particular, make provision as to— (a) the appointment of a person mentioned in sub-paragraph (3) who has not been involved in the investigation in question to consider any such complaint; (b) the time-table for the consideration of any such complaint. (3) The persons are— (a) a member of the CMA Board; (b) a member of the CMA panel; (c) a member of staff of the CMA.