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Ghost of Christmas Future

08 December 2011 #Employment

With the Christmas season now upon us, what gifts can employers expect to receive from the Government in 2012 and beyond?

It seems that barely a week can go by without the Government making an announcement on yet more proposals for employment law reform.    Quite frankly, it’s getting confusing!  Here we try to make sense of things by taking a sneak peek at the future parcels in store for employers.

“Gifts” from the Government in 2012 and beyond

This last month alone has seen the Government making four separate announcements about possible changes to employment laws. 

On 23 November 2011, the Business Secretary, Vince Cable, announced proposals for radical employment law reforms.  On the same day, the Government gave its written response to the Resolving Workplace Disputes consultation, which contained further details of employment tribunal reform. 

Also on 23 November 2011, Dame Carol Black (national director for health & work) and David Frost CBE (Director General of the British Chamber of Commerce) published their report to the Government entitled Health at work – an independent review of sickness absence.

Finally this year, on 29 November 2011, in the Chancellor of the Exchequer, George Osborne’s Autumn Statement (given in place of his pre-budget report) there were also a number of announcements of interest to HR professionals.

Some of these matters are still only proposals that will be subject to further consultation.  However, there are a few legislative changes that we know will come into force. 

Resolving Workplace Disputes:  Employment Tribunal Reform

In January 2011, BIS launched a consultation on reforming the employment tribunal system entitled Resolving Workplace Disputes.  Following publication of the Government’s written response to this consultation on 23 November, we now know that the following will happen: 

  • Unfair dismissal qualifying period: This will increase from one year to two years from 6 April 2012
  • Costs awards: The limit on costs awards will be raised from £10,000 to £20,000 and the limit on deposit orders (where a claim has little reasonable prospect of success) from £500 to £1,000
  • Witness statements: These will be taken as read unless the judge directs otherwise.
  • Judges sitting alone: Lay members will no longer be involved in tribunal hearings on unfair dismissal.  EAT judges will now always sit alone.
  • Witness expenses:  The litigating parties will be required to cover the cost of witnesses’ expenses – this will no longer be state-funded.
  • Financial penalties for employers: At the discretion of the tribunal, unsuccessful respondent employers may be ordered to pay a financial penalty to the Exchequer.  This will be half of the total award made by the tribunal (minimum of £100 and maximum of £5,000) and will be reduced by 50% if paid within 21 days.  Appeals against this penalty will be possible.
  • Early conciliation & mediation: Compulsory lodging of all claims through Acas, for an attempt at mediation, before they can be lodged with the tribunal.

Vince Cable also announced on 23 November that Mr Justice Underhill, the outgoing President of the Employment Tribunals, will now undertake a Fundamental Review of Employment Tribunal Rules, with a view to ensuring better management of cases in the tribunal.  We can expect the outcome of this review in April 2012.

Pensions:  Auto-enrolment

On 1 October 2012, new duties will come into play that will require employers to automatically enrol eligible jobholders into a pension scheme.  The new duties will apply to all employers in Great Britain and will be phased in over a four year period starting on 1 October 2012.  The largest employers will be required to implement the new arrangements first.  The Pensions Regulator has published a Staging Date Timeline setting out the likely staging dates that will apply to different sizes of employer.  However, on 28 November 2011, the DWP confirmed there would be a delay in implementation for "small businesses" - those with fewer than 50 employees. Further details about this change will apparently be announced in January 2012.

Consultation on Modern Workplaces

In May 2011, the Government published is Consultation on Modern Workplaces which set out a plan to create a culture of flexible, family-friendly practices.  A response to this consultation is expected in early 2012. The proposals include plans to introduce:

  • Flexible parental leave: 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.
  • Flexible working: The right to request this to be extended to all employees with 26 weeks’ service and a new requirement for employers to consider requests “reasonably”.
  • Annual leave:  To bring the UK law into line with the ECJ judgments in Stringer and Pereda so that workers unable to take annual leave during the holiday year can carry unused leave over into the next year, including leave untaken due to maternity leave etc.
  • Equal pay:  The introduction of a new power for tribunals to order employers to conduct and publish compulsory pay audits, if found to have breached the Equality Act 2010 with regard to equal pay.

Sickness Absence

Back in February, Dame Carol Black and David Frost CBE were appointed to undertake a review of sickness absence.  They have now published their report, which includes the following recommendations:

  • An independent panel should sign off workers on long-term sick leave, which could trump whatever their family doctor says.
  • Those on long-term sick leave should be matched with more appropriate jobs rather than be left to fall out of work and claim benefits.
  • Jobcentre Plus should change its processes so that thousands of workers are prevented from needlessly going onto sickness-related benefits. The review team want to scrap the 13-week wait before those on sick leave are assessed.
  • Employment law should be changed to allow companies to dismiss workers on long-term sick leave without the risk of being sued, by negotiating a one-off cash settlement.
  • "Generous" public sector sick-pay schemes should be reviewed. Currently, the average state scheme entitles workers to six months` absence on full pay, compared to eight weeks in the private sector.
  • Employers that spend on medical treatments or workplace rehabilitation schemes to get sick people back to work quicker should be eligible for tax relief.
  • The current system for recovering statutory sick pay should be scrapped, saving the state £50m a year.
  • The Government must boost awareness among GPs and health care professionals that going back to work early after sick leave can aid recovery.
  • The Government should publish more guidance for doctors on how to fill out "fit notes" correctly. Too often sick individuals are signed off as entirely unfit for work when they could be able to come back under flexible hours or changed duties.

The Government is expected to publish its response to this report in January 2012.

Further proposals to watch for:

  • Rapid Resolution Scheme: consultation on a scheme to enable simple claims to be settled within three months.
  • Collective redundancy consultation:  BIS has made a call for evidence (in other words is seeking views) on reducing the minimum period for collective redundancy consultation from 90 days to 60, 45 or 30 days.  The opportunity to put forward views on this will close on 31 January 2012.
  • TUPE 2006:  BIS has also called for views on the effectiveness of TUPE.  Again this will close on 31 January 2012.
  • Consultation on making compromise agreements less complex.
  • Consultation on the introduction of tribunal fees for bringing a claim.  Unconfirmed reports suggest that it will cost £250 to enter a claim, a further £1,000 once the claim has been listed for a hearing, with higher fees if the claim exceeds £30,000.  It is possible that fees will be introduced in December 2013.
  • Red Tape Challenge:  This was a project aimed at identifying current regulations that could be scrapped, merged, simplified or improved.  The Government is expected to report back on its findings in the Spring of 2012.
  • Ministers are seeking views on whether firms with 10 or fewer employees should be able to sack staff without risk of an unfair dismissal claim if they pay compensation through a no-fault agreement.
  • Consultation on the introduction of protected conversations, with the proviso that they will not extend to protect discriminatory acts.
  • Implementing the recommendations of the Löfstedt review of health and safety regulation, including simplifying guidance and codes of practice; taking measures to ensure that there is consistent regulation across the UK; and taking steps to ensure that businesses are held accountable only for those things that they can realistically manage.
  • A move to a simpler, quicker and clearer dismissal process, potentially including a revised Acas code of practice.

So, despite the coalition Government’s quest to reduce unnecessary regulation of business, and to boost economic growth, it seems we are going to have to get our heads around yet more employment regulation in 2012 and beyond. Clarkslegal and Employmentbuddy will do its best to keep you up to speed!

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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