Employment eBulletin January 2012 - Forthcoming changes to UK employment law

2012 is set to be a year of significant change in UK employment law and employers will need to be alert to the various proposals due to be implemented throughout the course of the year.  Below, we set out the key changes and highlight important areas of ongoing consultation.

February 2012
From 1 February 2012, the maximum award of compensation in the employment tribunal for successful unfair dismissal claims will increase from £68,400 to £72,300. The new limits will apply where the effective date of termination is on or after 1 February 2012. As before, there will be no limit on the amount of compensation in discrimination claims.

The limit on a week’s pay, used for calculating basic awards or statutory redundancy payments, will also increase from £400 to £430 on 1 February.

April 2012

• Currently, an employee with 51 weeks’ service or more is eligible to claim unfair dismissal in the employment tribunal.  This is set to increase to 2 years in April.  At the moment, it is unclear whether the increase in qualifying period will apply to existing employees or only to those who join after the implementation of the change.  If history is any indication, in 1985 when the qualifying period was last increased from 1 to 2 years, it applied solely to those joining on or after the date of the change.
• Changes to employment tribunal procedure:
• The amount of costs the Employment tribunal will be able to award will increase from £10,000 to £20,000;
• The limit on deposit orders will increase from £500 to £1,000;
• To save time in tribunal proceedings, witness statements will be taken as read unless otherwise directed  by the judge;
• Witness attendance expenses will cease to be state-funded and the tribunal will be able to direct that parties bear the cost, including the ability to direct that the losing party pay the cost of the winning party’s witness expenses;
• Judges in unfair dismissal cases will sit alone, without lay members.
• Statutory maternity, paternity and adoption pay will increase to £135.45 per week.
• Statutory sick pay will increase to £85.85 per week.

October 2012
Pension auto-enrolment will commence for large employers.  Over the course of the next 4 years, all UK employers will be required to enrol eligible job holders into a qualifying workplace pension scheme or National Employment Savings Trust (NEST), into which the employer must contribute.

Dates yet to be announced

• Financial penalties will be introduced for employers who lose in the employment tribunal.  It is proposed the minimum penalty will be £100 with a maximum limit of £5,000.  The level of fine will be based on half the tribunal award and will be reduced by 50% if paid within 21 days.  Where a non-monetary award is made, the tribunal will assign a value to the penalty.

• Claimants will be expected to consider pre-claim conciliation with ACAS for a period of one month at the outset of any dispute.  Claimants will be required to submit details of the dispute to ACAS with a view to resolving the issue before tribunal proceedings are commenced.  If conciliation fails or if either party is unwilling to participate, a claim can be filed as usual.  Entering into conciliation will temporarily stop the clock running on the time limit for presenting a claim and Claimants will have one month from the conclusion of conciliation to present their claim.

• Protected disclosures: soon employees will no longer be able to make a protected disclosure (whistle blow) about breaches of their own employment contract.

Areas of ongoing discussion

Employment tribunal fees:
It has already been decided that fees will be introduced for bringing a claim in the employment tribunal.  Two proposals on fee structures are currently being considered:

1. an issue fee and hearing fee, the level of which will depend on the nature of the claim (likely to be in the region of £200 and £1,000 respectively); OR
2. an issue fee only, based on the amount the claimant proposes the claim is worth.  For example, an unfair dismissal claim of less than £30,000 would cost £500 to issue.  One worth more would cost £1,750.

Consultation is due to close on 6 March.

TUPE and collective redundancy consultation:
The Government is currently calling for evidence on proposals to simplify the TUPE Regulations 2006, with the focus being on the rules relating to service provision changes.

There is a further call for evidence on proposals to reduce the 90 day consultation period in collective redundancy consultations involving 100 or more employees.

Calls for evidence will close on 31 January.

The Government will also be seeking views on its proposal to implement a system of “compensated no-fault dismissal” for companies with 10 or fewer employees.

Flexible parental leave, flexible working, annual leave and equal pay:
In May 2011 the Government published its 4-point plan to create more flexible, family-friendly working practices. 

This included proposals for:

• unpaid leave for fathers to attend ante-natal appointments; 
• 18 week’s maternity leave for mothers plus 34 weeks’ shared parental leave;
• all employees with 26+ weeks’ continuous employment to have the right to request flexible working;
• employers to consider requests for flexible working “reasonably”;
• amendment to the Working Time Regulations to clarify when statutory leave can be carried over from one holiday year to the next and to create greater flexibility by allowing employers to “buy out” the additional 1.6 weeks’ leave entitlement under Regulation 13A or require employees to carry over the 1.6 weeks in cases of “genuine overriding business need”;
• tribunals can order employers to conduct and publish a pay audit where it has breached the Equality Act 2010.

Consultation closed on 8 August 2011 and it is expected that the Government will publish its response in early 2012.

The Government is also expected to consult upon:

• “protected conversations” which will allow employers and employees to talk on a “without prejudice” basis whether or not there is a dispute in place;
• the simplification of compromise agreements with standard text;
• a rapid resolution scheme for straightforward, low value claims at the employment tribunal.

We will notify you of any further updates as and when they are published.

If you have queries in relation to any of the above changes and proposals, the Wright Hassall employment team is here to help.