Employment Law Update – October 2013

By October 14, 2013Uncategorized

It’s been a very busy last few months with changes in Employment Law and it’s not over yet. There is more to come.  Here’s a catch up on some of the recent key changes and what’s ahead of us.

SETTLEMENT AGREEMENTS AND PRE TERMINATION NEGOTIATIONS
With effect from 29th July 2013, Compromise Agreements have been re-named as Settlement Agreements.

In addition, conversations between the employer and employee with a view to ending the employment relationship under a settlement agreement are not admissible as evidence in most unfair dismissal claims. However, discussions will not be protected if the reason for parting company is for an automatically unfair reason and…..  Claimants can rely on what was said during pre-termination negotiations as evidence in other types of claims they may want to bring e.g. a discrimination claim or a claim for breach of contract. Therefore it may be worth considering following the “without prejudice” principles for some pre-termination discussions.

ET FEES
This new tribunal regime is now up and running although this is being challenged as unlawful by Unison and a judicial review of the case is to be heard in the High Court on 22 and 23 October 2013. Until a decision has been reached, the new system remains.  If the new system is held to be unlawful, any ET fees paid will be refunded.

To lodge a claim in an employment tribunal, an individual will need to pay a fee, or apply for fee remission. The fee (or fee remission application) has to be sent at the same time as the claim is submitted. A fee will also be payable in respect of any appeal to the E AT.

There are two levels of claim fees depending on the complexity of the claim being pursued.

Type A claims which include unpaid wages, holiday pay and redundancy payment will cost £160 on submission of the ET1 and a further £230 for the hearing. Type B claims which include unfair dismissal, discrimination and equal pay will cost £250 for submission of the claim and a further £950 for the hearing.

CAP ON UDL COMP AWARD
A limit has been placed on the compensatory award for unfair dismissal cases. The maximum award will be either £74,200 or 52 weeks’ pay, whichever is the lower.  This came into force on 29 July 2013 and will only apply to dismissals after this date.

EMPLOYEE SHAREHOLDERS
This has now come into force (1 September 2013).  We now have a new type of employment status whereby the employee waives his or her statutory rights to most unfair dismissal claims (not automatic UDL); a statutory redundancy payment; to request time off for training; to request flexible working and to give longer notice to return early from family related leave  in exchange for shares in the Company of not less than £2000 which will be free of capital gains tax (capped at £50k) at disposal.  The employer must pay for the employee to take legal advice and provide a statement with details of the shares. A cooling off period of 7 days must also be given.

Interestingly, if an employee sells his or her shares then the employee shareholder employment status remains unchanged unless a change of contract is agreed.

NATIONAL MINIMUM WAGE
The increases below will take effect from 1 October 2013:

  • 21+ £6.31
  • 18-20yrs £5.03
  • under 18yrs £3.72
  • apprentice £2.68

THIRD PARTY HARASSMENT
The third party harassment provision in the Equality Act has been repealed from 1 October 2013. However, employees who have been subjected to harassment by a third party may still be able to bring a claim against their employer for constructive unfair dismissal if the employee resigns as a result of the employer failing to take steps to protect him or her. At worst, the employer could be liable for discrimination if the failure to act is because of the employee’s own sex or race.

EARLY CONCILIATION TO COME INTO FORCE
From April 2014 before lodging a claim to the Tribunal all claimants will need to notify Acas of their proposed claim. In turn Acas will then offer conciliation to both parties. If conciliation is unsuccessful or refused within the set period (one month – although this may be extended by up to two weeks if settlement is likely) the claimant can proceed with lodging a tribunal claim.

TUPE
These changes are now likely to be implemented in January 2014 although this has not yet been confirmed.

Following consultation, the Government has set out what changes it is now going to implement and what it has decided not to go ahead with.

Changes that WILLbe made are:

  • To allow renegotiation of terms agreed from collective agreements one year after transfer, provided any changes are no less favourable to employees
  • The location of a workforce can be within the scope of an economic, technical or organisational reason entailing changes in the workforce – preventing genuine place of work redundancies from being automatically unfair
  • Clarification that for there to be a TUPE service provision change, the service provision must be “fundamentally or essentially the same” as before the transfer
  • To allow micro businesses to inform and consult directly with employees
  • To allow TUPE consultation to satisfy collective redundancy consultation rules (in some circumstances).

The government is NOT going ahead with:

  • Removing ‘service provision change’ from what amounts to a TUPE transfer
  • Removing the transferor’s obligation to provide employee liability information although  the time for providing such information will be increased to 28 days.

FINANCIAL PENALTIES ON EMPLOYERS
This is now due to come into force from 30 April 2014. If a tribunal concludes that an employer has breached any worker’s rights to which the claim relates and considers that the breach has any “aggravating factor”, then it may order the employer to pay a penalty to the Secretary of State of between £100 and £5,000.  Like a parking fine, the penalty is halved if paid within a specific time limit – in these situations – 21 days of the tribunal’s decision being sent to the employer. What will be classed as an aggravating factor is causing much debate and if there is more than one claim involved there’s a whole set of complicated rules to deal with this – what joy!

SCHOOL LEAVING AGE
This has been increased to 17 years and is due to rise to 18 years in 2015.

FLEXIBLE WORKING
The Government proposes to extend the right to request flexible working to all employees and remove the current statutory procedure for considering requests. Instead employers will have a duty to consider all requests in a reasonable manner and respond within a “decision period” of three months (or longer if agreed). Employers will have the right to refuse requests on business grounds and the qualifying length of service to make requests will remain as well as restricting requests to one in any twelve month period. This is due in Spring 2014.

FINALLY…. SICKNESS ABSENCE AND HOLIDAY
There has been a lot of to-ing and fro-ing over the last few years regarding long term sickness absence and the accrual of holiday. The up to date position is that although  employees are entitled to accrue holiday whilst on long term sick and have it carried over into the next holiday year if untaken, it is only the four weeks’ ordinary leave that automatically carries forward into the next holiday year and not the additional 1.6 weeks – unless there is an agreement in place to say otherwise.

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