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2012 employment law changes that could affect your business

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Upcoming employment law changes in 2012 by Robert Tice

A host of employment law changes are planned for 2012 that could hopefully make running your business a whole lot easier.

It’s all due to the government’s “Red Tape Challenge” that aims to identify which existing employment regulations should be scrapped or improved.

The challenge aims to make life simpler for you as a business owner as well as to boost economic recovery in the UK.

Some of the main changes you need to be aware of include:

Resolving workplace disputes

This consultation is on wide-ranging reforms to the existing employment tribunal system. Its aim was to resolve more disputes earlier without recourse to a tribunal. It also looked at ways to achieve a fast, user-friendly and effective tribunal system to give business owners more confidence in hiring people.

Employment tribunal fees

This consultation is to consider the merits of two very different fee charging structures. The first option proposes an issue fee and a hearing fee, based on the size of the claim and whether it was an individual claim or multiple claims.

The second option is considering only an issue fee based on what the claimant states their claim to be worth.

Modern workplaces

This consultation sets out a plan for creating a culture of flexible, family-friendly employment practices in the UK. The main proposals include:

  • Unpaid leave for fathers to attend antenatal appointments and an 18-week period of maternity leave for mothers, followed by a new 34-week period of shared parental leave
  • The right to request flexible working to be extended to all employees with 26 week’s continuous employment and a new requirement for employers to consider requests “reasonably”
  • The ability for workers to carry used leave over to the next holiday year, including any not taken due to absence on maternity, adoption, parental and paternity leave
  • Increasing employer flexibility on annual leave by allowing employers to buy out their employees’ additional 1.6 week’s annual leave entitlement under regulation 13A of the WTR 1998; or to require employees to carry over all or part of this entitlement in cases of genuine overriding business need
  • New power for employment tribunals to order employers to conduct and publish a pay audit if it is found to have breached the Equality Act 2010

The government is also planning other consultations and reforms in the year ahead including:

  • Protected conversations enabling frank conversations between employers and their employees about performance or retirement
  • Looking at whether compromise agreements are unnecessarily complex, whether all existing and future claims are covered and whether to remove the list of all possible causes of action
  • A rapid dispute resolution scheme for swifter and cheaper determination of straightforward, low-value claims
  • The removal of third-party harassment provisions from the Equality Act 2010
  • Reducing the 90-day period for collective consultation in large-scale redundancy situations to 60, 45 or 30 days
  • Reviewing the effectiveness of TUPE 2006
  • Compensated no-fault dismissal for micro firms with 10 or fewer employees
  • Radically slimming down existing dismissal processes so they are simpler, quicker, clearer and fairer to both parties

Employment law update by Robert Tice – End of 2012

If 2012 were a film it would be likely to gain a middling 3 stars and such bland reviews as “never really got going”, “left me wanting more” and “not entirely thrilling and exciting”.  However, this may be music to many employers’ ears as the past few years have seen a large number of changes in employment law.  At times it has been hard for everyone to keep up to date with all the changes that Parliament has thrown our way, so a “quieter” year was most probably welcome.

With relatively few legislative changes actually coming into force, my review of 2012 is relatively brief.  The most notable change was the increase in the unfair dismissal qualifying period from one year to two years for new starters.

However, 2012 did see a large number of employment law reform announcements and consultations, as well as the usual case law updates.

I have picked a few key themes to review:

  1. We saw an increasing number of social network cases and employee comments on social networking sites are now a common feature in Tribunal cases.  This centres around what is considered as private and when the boundary is crossed and something is then considered as public. The Tribunals continue to struggle to reconcile the employer’s right to manage their employees with the employee’s right to freedom of expression.  What was made clear is that in these cases the context is everything.  What is clear is the need for employers to have a clear and unambiguous social media policy to deal with these issues.
  2. In 2011 the Tribunal warned that, in misconduct cases, if they consider an earlier warning to an employee to have been issued in bad faith or being manifestly unfair and inappropriate, that warning will be invalid.  Therefore, it should not be taken into account or relied on for any further disciplinary proceedings.  However, in 2012 the Employment Appeal Tribunal reminded Tribunals that once it has found an earlier warning to be valid (procedurally speaking) then it cannot look behind the warning to see whether it was in fact justified.
  3. Further encouragement for employers lies in the fact that similarity between the current misconduct and the misconduct which caused the earlier warning may not be required.  It was held that a final written warning implies that any further misconduct will be met with dismissal unless there are truly exceptional circumstances.
  4. We learnt that in order to be successful in a claim for constructive unfair dismissal, an employee must be able to show that their resignation was in response to a fundamental breach.  However, the breach need not be the only reason for the resignation.  In fact, it need not even be the principal reason for the resignation.  It is sufficient for a fundamental breach to have occurred, which was one of the reasons for resignation.
  5. The Courts have reminded employers of the importance of not only tailoring post-termination restrictions to each employee individually but also that there is a need to continually review these restrictions as an employee changes job role or is promoted.  There should also be evidence of the employee’s agreement to the new restrictions i.e. a newly signed contract to this effect.
  6.  The question of how to deal with holiday leave entitlements for employees on long-term sick leave has been grappled with again by the Tribunals throughout 2012.  However, we await the Government’s response to clarify this issue once and for all, with baited breath and much hope.

Preview of employment law changes in 2013

So what does the employment calendar look like in 2013?

February

  • The recently announced new Tribunal awards limits come into force.

March

  • The right to unpaid parental leave increases from 13 weeks to 18 weeks.
  • CRB checks, now known as DBS checks (disclosure and barring checks) will now be portable between employers and will be available online for employers to check.

April

  • Employee-shareholder contracts will be introduced by the Government.  Under these contracts employees will be given shares in their employer in exchange for them signing away certain employment rights.
  • Where there are 100 or more redundancies proposed, the consultation period reduces from 90 days to 45 days.  ACAS will update its guidance on this and it is expected that fixed-term contracts which have reached the end of their term are excluded from obligations to collectively consult.
  • The standard rate of statutory sick pay increases from £85.85 to £86.70 per week.
  • The standard rates for maternity, paternity and adoption pay are increased from £135.45 per week to £136.78 per week.

July

  • Employment Tribunal fees will be introduced for any employee who wishes to lodge a claim at the Tribunal.  An online system will be available in order to pay fees.  Currently, the fees proposed to depend on the type of claim brought, and are as follows:
    • level 1 claims (the very straightforward ones such as unlawful deductions from wages claims) – £160 issue fee; £230 hearing fee
    • level 2 claims (pretty much everything else) – £250 issue fee; £950 hearing fee
    • Employment Appeal Tribunal – £400 appeal fee; £1,200 hearing fee
    • there are several other fees, for example, £60 for an application to dismiss following settlement and £600 for judicial mediation
  • Tribunals will have the power to order the unsuccessful party to reimburse the fees paid by the successful party and a fee “remission” system will operate for those who cannot afford to pay these fees.  However, the Government has not yet released details of this.

Summary

A cap of 12 months’ pay will be imposed on the compensatory award for unfair dismissal claims.  The current financial cap will remain if 12 months’ pay is greater than the 12-month cap.

Looking further into the future of employment law

  1. The Government are still working on a number of further consultations. These that have not yet been finalised but are expected to be concluded, and in some cases the changes implemented, by the end of this year.  Examples include: TUPE to be amended to remove service provision changes from attracting TUPE protection and to remove the obligation for the provision of employee liability information, along with other important amendments.
  2. Pre-termination negotiations between employers and employees relating to terminating the employee’s employment to become inadmissible in most unfair dismissal cases, unless the employer has acted “improperly”.  These are currently called Compromise Agreements but would be re-named Settlement Agreements.  Settlement Agreements would have a standard template form and a Statutory Code of Practice would be implemented that must be followed.
  3. Compulsory ACAS conciliation to be introduced before a claim can be bought at the Tribunal.
  4. Whistle-blowing legislation to be amended to stipulate that only disclosures made in the public interest will gain protection.  This will mean that employees cannot just rely on breaches of their own contract to gain protection.
  5. The Working Time Regulations to be amended to deal with the carry-over of holiday leave for employees on long-term sick leave.  This should bring some welcome clarity in this area for employers.
  6. The ACAS Code of Practice is expected to be revised, amended and updated.

So it can be seen from this that the seas of 2013 may well be choppy and much change is ahead.  We will be providing you with updates in relation to each of the changes as and when they are confirmed or come into force.

If you want advice and assistance on any part of employment law, including how changes to legislation may affect your business, please contact Emma Tice on 01332 226149 for confidential advice.

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