Published Winter 2012 / 2013

The Government’s ‘red tape challenge’ is set to bring more changes to employment law this year.

As of 1 February 2013, the limits on Employment Tribunal awards increased as follows:

Compensation Limit Previous Figure Figures from 1 February 2013
The cap on a week’s pay (used, for example, for
calculating statutory redundancy pay and the basic
award in unfair dismissal cases)
£430 £450
The maximum compensatory award for unfair dismissal
(*see also Summer 2013 below)
£72,300 £74,200
The minimum basic award in cases where the dismissal
was unfair by reason of health and safety, trade
union activities etc
£5,300 £5,500
Limit on amount of guarantee payment payable
to an employee in respect of any day
£23.50 £24.20

Other key dates and proposals

March 2013:

the following changes will be introduced:

  • increasing the right to parental leave from 13 weeks to 18 weeks per parent per child;
  • extending the right to request flexible leave to agency workers on return from parental leave;
  • removing employers’ potential liability for harassment by a third party;
  • abolishing discrimination questionnaires; and
  • revised ‘fit note’ guidance for GPs, employers and individuals to emphasise the importance of assessing an individual’s health condition in relation to work in general and not just for one specific role.

April 2013:

the following changes will be introduced:

  • reducing the requirement for a 90-day consultation period to a 45-day consultation period for collective redundancies where 100 or more employees are affected. Employees on fixed term contracts which expire on their due date will be excluded for the purposes of calculating the number of affected employees;
  • a new ACAS Code will be produced which will address the meaning of an ’establishment’ for the purposes of consultation on collective redundancies;
  • the new Employment Tribunal Rules of Procedure will be introduced. The Government has not yet published its response to the consultation on the proposed new rules. Therefore, it is unclear at this stage to what extent the proposals will be adopted (watch this space!);
  • amendments to the Employment Rights Act 1996 so that an individual cannot bring a whistleblowing case relating to a breach of their own contract that is not in the public interest, and
  • the Finance Act will be amended in anticipation of the proposed new ‘employee shareholder’ status. The proposal includes that employees will waive certain rights such as unfair dismissal and statutory redundancy rights in return for shares worth at least £2,000. Any gains up to £50,000 on the shares will be exempt from Capital Gains Tax. There is no confirmed date in relation to the other changes required in order to introduce this new employee status.

Summer 2013: Further Changes:

Unfair Dismissal

• *The unfair dismissal compensatory award will be capped at the lower of one year’s pay and the maximum compensatory award.

Early Conciliation

  • The Government will introduce a new mandatory ‘Early Conciliation’ period to be operated by ACAS. The Claimant must submit an Early Conciliation Form to ACAS in all employment disputes (subject to very few exceptions). Once the Early Conciliation Form has been submitted the clock stops on the limitation period to file an ET1 Form for up to a month (which can be extended by two weeks) while discussions through ACAS take place. ACAS must issue an EC Certificate before Employment Tribunal proceedings can be issued.

Employment Tribunal Fees

  • Employment Tribunal Fees are proposed to be introduced around summer 2013. However, no specific date has been confirmed. The level of fees is, in our view, relatively high and perhaps likely to affect the number and nature of claims made.
Compensation Limit Previous Figure Figures from 1 February 2013
Level 1 claims – straightforward claims such
as unlawful deductions and statutory redundancy pay
£160 issue fee £230 hearing fee
Level 2 claims – most other claims including
unfair dismissal and discrimination claims
£250 issue fee £950 hearing fee
Employment Appeal Tribunal £400 appeal fee £1200 hearing fee
Application Fees – various and including, for example: £60 for an application to dismiss proceedings following
settlement; and up to £600 for judicial mediation
  • The fees are payable by the Claimant although a remission scheme will be introduced for Claimants who can show that they cannot afford fees. The hearing fee will be payable four to six weeks before the hearing. Employment Tribunal Judges will have a power to order the unsuccessful party to reimburse fees paid by a successful party, although this will be at the Judge’s discretion rather than automatic.

Pre-Termination Agreements

  • New rules on pre-termination negotiations will be introduced to the effect that settlement offers will be inadmissible as evidence to an Employment Tribunal in any subsequent unfair dismissal claim (provided that there has been no ‘improper behaviour’ by either party). However, settlement offers will remain admissible as evidence to an Employment Tribunal in other complaints such as contractual disputes and discrimination complaints.

Settlement Agreements

  • Compromise Agreement will be replaced by Settlement Agreements. Employees will still be required to obtain independent legal advice. There will be a Code of Practice and Guidance issued. The Code will, amongst other things, include: (a) draft letters; (b) an optional settlement agreement; and (c) define ‘improper behaviour’.

Also during 2013

  • The Government intends to introduce financial penalties for employers who lose at Tribunal. Tribunals will have the discretion, for example where there are aggravating features, to impose a penalty on an unsuccessful employer of 50% of any financial award made to the Claimant, subject to a minimum of £100 and maximum £5000. Where there is a non-financial award the Tribunal will be able to give it a notional financial value. The penalty with be reduced by 50% if the penalty is paid within 21 days.

October 2013

Changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 will be introduced and are likely to include:

  • removing the strict requirement for employer liability information;
  • providing that ‘entailing changes in the workforce’ for the purposes of establishing an ETO defence to claims of unfair dismissal will include a change in location of the workforce;
  • enabling transferees to consult with transferring employees in relation to collective redundancies prior to the transfer.
  • It is also intended that the Service Provision Change provisions (under TUPE) will be removed but it is recognised that this change will require a lead in time before it can be fully effective and so this is unlikely to be in October.

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