Employment Legislation – Recent Important changes and a Timetable for the coming months

• April 2014

  ACAS early conciliation is introduced. From 6th April 2014 anyone thinking of making an Employment Tribunal claim will need to notify ACAS first. ACAS will then offer a new free service called Early Conciliation for up to one calendar month which may be extended by two weeks if there is a reasonable chance of achieving a settlement quickly without the need for legal action. ACAS will issue a certificate to confirm that discussions have taken place. Prospective claimants will have to contact ACAS and allow them to promote settlement before being permitted to lodge a claim with the Employment Tribunal. Whilst parties will not be forced to engage in conciliation, they will have to wait until the process has been exhausted before going any further, giving ACAS the opportunity to explore the possibility of settlement.

  The normal conciliation period will be one calendar month, but an ACAS officer can extend this period by a further 14 days if he or she believes that there are realistic prospects of a settlement and both parties agree to the extension. However, the ACAS officer could also cut short the conciliation period if he or she believes there are no real prospects of a settlement being reached.

  If this process does not result in settlement, the claimant will be issued with an early conciliation certificate containing a unique reference number. The claimant will not be able to lodge a tribunal claim without a valid reference number. The time period for making claims to Employment Tribunals will be extended to allow for this conciliation period.

  For more detail on this see Section Two of our Newsletter.

• Changes to compensation limits. The annual review of compensation levels has taken place and came into force on 6th April 2014. It increases the maximum compensatory award (for unfair dismissal) from £74,200 to £76,574 (try remembering that!) – subject still, of course, to the overall limit of one year’s pay which was introduced in July last year.It also increases the maximum for a ‘week’s pay’ from £450 to £464. This is used to calculate statutory redundancy pay and the basic award for unfair dismissal as well as certain other awards.

• As suspected, the introduction of tribunal fees last July is starting to have an impact on the number of claims. The latest Ministry of Justice stats show a 79% drop in the number of tribunal claims in the last 3 months. Employers will say that this shows that fees are stopping time wasting claims with little prospect of success. Others groups are saying that the fees are preventing some genuine claims from going ahead; denying employees their right to a hearing.The legal challenge to the fee system has failed at the first stage, but is likely to be appealed. So the fee system remains … for now!

• It has also been announced that from October 2014 the pay rates for the National Minimum Wage will be £6.50 per hour for adults; £5.13 an hour for 18-20 year olds and £3.79 an hour for 16-17 year olds.

• Changes to statutory sick pay, maternity pay and other statutory payments come into force in April.Statutory sick pay will increase to £87.55 per week (up from £86.70). Statutory maternity pay, statutory adoption pay, statutory paternity pay, and additional statutory paternity pay will increase to £138.18 per week (up from £136.78).The changes come into force on 6 April 2014.

• Repeal of the discrimination questionnaire provisions; used for claimants to request information in discrimination and equal pay cases; to be replaced with an informal approach set out in ACAS guidance.

• Penalty payments. For cases presented to an employment tribunal on or after 6 April 2014, tribunals will have the power to order that an employer who is unsuccessful at tribunal pay a financial penalty, on top of any compensation due to the successful claimant, when the employer’s breach of employment law has “one or more aggravating features”. It is not yet known how this will be interpreted but earlier consultation papers suggest that this would include unreasonable behaviour such as neglect or malice. If the tribunal makes an award of compensation, the amount of the financial penalty will be 50% of the award. The penalty is subject to a minimum threshold of £100 and an upper ceiling of £5,000. However, employers will qualify for a reduction of 50% if they pay the penalty within 21 days.These are effectively a “fine” as the payment goes to the chancellor, not the claimant!

• Delayed!! The Right to Request Flexible working to be extended to all employees. Now due 30 June. All employees who have worked for their employer for 26 weeks or more will have the right to request flexible working, rather than just parents or carers of adults. As a result, employers may well see a rise in the number of requests. In addition, the current statutory procedure which governs the right to request flexible working will be replaced by a less prescriptive duty to consider requests for flexible working ‘in a reasonable manner’. Acas has issued a Guide for Employers on the new scheme, and a short article can be found in Section Two of this Newsletter.

• Abolition of the statutory sick pay record keeping in favour of giving employers the discretion to use a system which suits them.

• Shared Parental leave and pay. Although not coming into force until 2015, employers need to soon start considering the reshaping of their existing maternity, paternity, adoption and parental leave systems. In particular, employers should consider terms of any existing enhanced contractual maternity schemes. The Government is currently consulting on various options for taking the leave.

• Surrogate mothers. The European Court has very recently decided that a surrogate mother is not entitled to maternity pay or leave – only the birth mother qualifies. However the UK government plans to extend the scope of adoption leave and pay to include parents of children born via a surrogacy arrangement, probably from April 2015.

• Delayed! The Department for Work & Pensions (DWP) is establishing a new ‘Health and Work Service’. The new service will:
  • Provide telephone and web-based general advice on health and work. Available free of charge to employers, employees and GPs, the advice will be aimed at reducing length of sickness absence and supporting employment.
  • Provide an occupational health assessment for employees who have been, or are likely to be, on a period of sickness absence lasting four weeks or more. The focus will be on the production of a ‘return to work plan’ setting out the obstacles preventing a return to work, recommending temporary adjustments/interventions to address the obstacles and a timetable for return to work. The normal referral route will be via a GP, although an employer route will be available if the GP has not referred after four weeks, and it has the employee’s consent.

  The service is now due to ‘go live’ with a staged approach from Autumn 2014, with a full national service in place by April 2015.

• Zero Hours contracts. Given the recent media headlines, you would be forgiven for thinking that zero-hour contracts were a new type of contract that place employees at the mercy of unscrupulous employers. But it is the potential for ‘misuse’ by Employers rather than the actual use of such contracts which has led to the current controversy.The recent publicity over potential abuses has led to a government consultation which runs to 13 March. The consultation identifies the two main concerns posed by zero hour contracts: Firstly, there is concern over exclusivity clauses (where the Employer restricts or even bars the worker from having other employment;) secondly is the lack of transparency or clarity in the contracts.Some restrictions on the use of such contracts is widely anticipated.

• Pension Auto EnrolmentPensions auto-enrolment –the time period for employers to auto-enrol eligible jobholders into a qualifying pension scheme is extended from one month to six weeks. The deadline for providing information to the Pensions Regulator is also extended – from 1 April.Auto-enrolment dates for small and medium sized employers are as follows:

• March 2014

  The Legal Aid, Sentencing and Punishment of Offenders Act 2012 received Royal Assent on 1 May 2012 and was due to come into force in April 2013. However after several delays it was enacted on 11 March 2014.

  Under the legislation, ex-offenders offences will be spent much sooner than before, meaning that they will not have to declare them to employers for as long. Now the Act is in force, only those who have served prison terms of more than 4 years will have to declare their offences for the rest of their lives. Previously those who were sentenced to more than 2.5 years have had to make such a declaration forever.

  Note however that for a wide range of occupations, such as care work and teaching for example, this law does not apply, so all offences are relevant and not “spent”.

  Changes include:

  For custodial sentences:

All offenders will still have to declare previous convictions when applying for jobs in specified workplaces, such as schools, care homes etc.

Other recent changes to March 2014

• Tribunal fees to stay (for now)Following the introduction of employment tribunal fees last year, the Trade Union Unison issued a judicial challenge on the basis that the fees were “unlawful” and imposed “unfair and punitive” fees on claimants, disproportionately affecting low-earners, particularly women and part-time workers. Dismissing Unison’s claim in the High Court in February, Lord Justice Moses said that “…the fundamental flaw in these proceedings is that they are premature and that the evidence at this stage lacks that robustness necessary to overturn the regime.”While this decision will discourage frivolous claims, it is likely that the judgement will not be the end of the matter. Unison’s General Secretary, Dave Prentis, said: “The decision is very disappointing but we will fight on and take our very strong arguments into the Appeal Court.”
• Minimum Wage.Penalties for employers who do not pay the minimum wagerose substantially from 7 March. BIS has published information on the new penalties.Rogue employers who do not pay their workers the National Minimum Wage (NMW) will face an increased penalty of up to £20,000 as part of government’s crackdown on employers who break the law.Currently employers that break NMW law must pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid. The previous penalty an employer could face was £5,000.Following an announcement by the Prime Minister before Christmas, the government will increase the financial penalty percentage from 50% to 100% of the unpaid wages owed to workers. The maximum penalty will increase from £5,000 to £20,000.

• January 2014

TUPE

The Government has made a number of changes to the TUPE Regulations after a long period of consultation.

The main changes apply to transfers on or after 31 January 2014 and are:

• allow the renegotiation of terms agreed from collective agreements one year after transfer, provided any changes are no less favourable to employees.
• confirmation that where contracts of employment incorporate provisions of collective agreements which may be agreed from time to time (e.g. future pay rises), the transferee is not bound by any future changes agreed after the transfer where the transferee is not a party to the collective bargaining for that provision; this is known as the static test.
• Change of work place location can be within the scope of an economic, technical or organisational reason entailing changes in the workforce, thus preventing genuine place of work redundancies from being automatically unfair – but still subject to “normal” fairness rules.
• clarify that for there to be a TUPE service provision change, the service provision must be “fundamentally or essentially the same” as before the transfer. The bigger the change to the way the service is delivered, the less likely it will be for TUPE to apply.
• Note: these changes to not apply to Northern Ireland for the time being. For transfers on or after 1 May 2014:

• the transferor must provide the required employee liability information 28 days (rather than the current 14 days) before the transfer.For transfers on or after 31 July 2014:

• ‘micro-businesses’ (fewer than 10 employees) can directly inform and consult with employees for the purposes of TUPE in certain circumstances where there is neither a recognised union nor existing appropriate representatives.Importantly, the government is not:

• removing ‘service provision change’ from what amounts to a TUPE transfer
• removing the transferor’s obligation to provide employee liability information.
• ImmigrationNationals of Bulgaria and Romania, the ‘A2’ countries who joined the EU in 2007, had their restrictions on working in any EU Member State lifted from 1 January 2014