04 January 2013 #Employment
As ever there are many changes to employment legislation confirmed for 2013 and further proposals and consultations that we anticipate will develop. This article outlines our expectations for the year ahead.
March marks the start of a number of changes to legislation.
Parts of the Equality Act 2010 will be repealed, abolishing the provisions for third party harassment claims (s40(2)-(4)) and discrimination questionnaires (s.138).
The Parental Leave Directive (2010/18/EC) is implemented into UK law with an increase in parental leave entitlement from 13 to 18 weeks.
Under the Protection of Freedoms Act 2012 the Criminal Records Bureau (CRB) is now called the Disclosure and Barring Service (DBS) and reports will now be portable between employers thus removing the burden of needing a new report each time a worker changes job.
From 6 April 2013 the 90 day minimum consultation period before the first redundancy can take effect is reduced to 45 days where 100 or more employees are affected.
The government hope that through their Growth and Infrastructure Bill 2013 by April they will have inserted s305A into the ERA. This change will create a new type of employment status, employee shareholders. In exchange for shares in their employer, the employee may agree to give up:
Plus, the employee must give 16 weeks’ notice of intention to return early from maternity or adoption leave.
Given the complexities that these changes entail in matters such as tax, it may be optimistic of the government to bring them into force in the next 4 months as planned.
The Children and Families Bill will be introduced setting out a new system of flexible parental leave and flexible working
Enterprise and Reform Bill – changes expected in 2013
i) Unfair Dismissal Compensation
The Secretary of State will be given the power to cap unfair dismissal compensation awards. The cap could be set at an amount of between one and three times` median annual earnings (currently £25,882 - £77,646), or a number of weeks` pay (not less than 52 weeks), or the lower of these two figures. The cap may differ for different employers.
This could make higher earning employees consider taking action in the civil courts rather than the tribunal.
ii) Negotiated Settlements, Pre-Claim Conciliation
Although the idea of “protected conversations” with employees has been dropped, pre termination negotiations (made by either party) will be inadmissible in the tribunal. This will be very similar to current “without prejudice” negotiations but will only apply for unfair dismissal claims. An employee though would still need to have independent legal advice before agreeing a settlement.
Compromise agreements will be renamed settlement agreements with the intention of there being a standard template.
There will be a new duty on parties to attempt pre-claim ACAS conciliation. This will be a mandatory process and a tribunal claim will not be possible unless the claimant can prove it was not possible to reach settlement. The tribunal deadline will be extended to allow for this negotiation.
iii) Equal Pay
An employer found liable for gender pay discrimination may face the extra burden of having to conduct an equal pay audit on their workforce, unless they have carried this out already in the last 3 years, have transparent pay practices or have a good reason why this would not be useful.
iv) Penalties for Employers
An employer who loses at the final hearing could face the consequence that the tribunal will be able to impose a financial penalty on them of 50% of any financial award made to the claimant. There will be a £100 minimum and a £5,000 maximum. The money though will go the Secretary of State and not the claimant. This penalty is not automatic and will be at the tribunal’s discretion.
The Enterprise and Regulatory Reform Bill will tighten the definition of disclosure in the ERA 1996, so a worker must now have a genuine belief that their disclosure is “in the public interest”.
With the stated intention of going some way towards the tribunal system reducing their cost to the taxpayer (£84.2 million in 2010/2011), fees will now have to be paid. No date has actually been set but fees are expected to be introduced in summer 2013.
There will be an initial fee and then a further fee due 4 -6 weeks before the hearing.
The amount to be paid will depend on the type of case, lower value and potentially less complex claims such as for wages, redundancy pay or notice will have an issue fee of £160 with a further £230 hearing fee. Other claims such as unfair dismissal, discrimination and equal pay will have an issue fee of £250 and a further hearing fee of £950.
The fees for joint claims will be less for each individual claimant and there will be other fees for applications and to appeal.
As part of moves to close the gender gap in the boardroom, the Companies Act 2006 (Strategic Report and Director’ Report) Regulations 2013 requires disclosure in the director’s report of the number of men and women in the company who are:
This requirement will apply only for companies quoted on the stock exchange with financial years ending on or after 1 October 2013.
Review of Tribunal Rules and Procedures
Since November 2011 the outgoing EAT president Mr Justice Underhill has been reviewing Employment Tribunal rules and procedures. On 29 June 2012 he published his proposals for consultation which included:
The consultation on these proposals ended on 23 November 2012, so we should expect more progress in 2013.
Employment related consultations that are ongoing in 2013 include
Like the Underhill review it may be realistic to expect the proposals from these consultations, to be part of an update on new legislation for 2014.