It is that time of year again when the UK Government brings into force legislative changes relating to employment law. In this update we highlight the changes taking place in April 2012 and consider the impact these might have for employers.
Qualifying Period for Unfair Dismissal
The qualifying period for ordinary unfair dismissal claims (and the right to written reasons for dismissal) will increase from one to two years for those employees whose continuous employment with an employer begins on or after 6 April 2012. Employees who were employed before 6 April 2012 will still only need one year’s continuous employment before they can bring an ordinary unfair dismissal claim. (Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012).
Whilst there is nothing for you to do in relation to this change itself, you should be aware that any employees employed before the deadline will still be subject to the existing regime and could therefore claim unfair dismissal protection after one year’s service. You should keep a note of the start dates of employees’ employment to ensure you know which category each employee falls into. For our views on the implications of this change, see our previous blog – Impact of UK Government’s plan to increase the unfair dismissal qualifying period.
Employment Judges to sit alone on Unfair Dismissal Hearings
From 6 April, unless the Employment Judge indicates otherwise, all unfair dismissal cases heard on or after 6 April, will be heard by a single Employment Judge, without any lay members. This decision will be reviewed in a year’s time. (The Employment Tribunals Act 1996 (Tribunal Composition) Order 2012 amends section 4(3) Employment Tribunal Act 1996).
Since unfair dismissal was introduced in 1971, Tribunals deciding such cases have always comprised a chairman and two lay members, one from industry and from a trade union background. The change to an Employment Judge alone will save the extra cost of employing the lay members but, more significantly, it is intended also to speed up the Tribunal process and shorten the waiting time for part-heard cases. Cases which include discrimination issues will continue to be heard by a full panel.
Definition of ‘independent adviser’ clarified
From 6 April the so-called drafting error in section 47 Equality Act 2010 will be corrected by an amendment which clarifies the term ‘independent adviser’ for the purposes of a compromise agreement. (The Equality Act 2010 (Amendment Order) 2012).
One of the requirements for a valid and enforceable compromise agreement is that the employee signing the agreement must have had advice from an independent adviser about the terms and effect of the agreement before signing it. Section 147(5) of the Equality Act 2010 states that the independent adviser must not be someone who is representing one of the parties in the claim. Confusion arose, therefore, as to whether the employee’s representative would qualify as an independent adviser whilst they were representing them in the claim. If the employee’s adviser was not considered independent, another party would need to be engaged. Section 147 as amended makes clear that the employee’s representative will be classified as an independent adviser under the Act.
With the amendment in place, employers can now rely on properly drafted compromise agreements to settle Equality Act claims. Any additional measures which have been put in place to alleviate any previous risk that such agreements were unenforceable can therefore be dispensed with.
Changes to Tribunal Procedure
As of 6 April, the Employment Tribunals (Constitution and Rules of Procedure)(Amendment) Regulations 2012 come into force. These amend the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004. The new rules apply to all cases submitted to an employment tribunal on or after 6 April 2012.
(a) Deposit Orders
Where a Tribunal considers that a party’s claim has little prospect of success, they will be able to order that party to pay up to £1000 into court as security for the claim. Currently, the maximum amount that a party can be required to deposit into court is £500.
(b) Costs Award
The maximum costs award that a Tribunal will able to make will be £20,000. This is an increase from the current maximum of £10,000. This maximum will apply only to the costs orders applied by the Tribunal but it will still be possible to refer the costs hearing to the County Court for a detailed assessment, in which case this maximum will not apply.
(c) Witness Statements
Unless the Tribunal directs otherwise, witness statements presented to a Tribunal will stand as the witness’ evidence in chief. This means that the witness statement will be taken as read.
(d) Witness Expenses
State funded expenses for witnesses at hearings will be withdrawn. Nevertheless, the power of the Tribunal to direct parties to bear the expenses of any witness will remain.
These are points to be aware of when attending Tribunal hearings and/or considering strategy.
Abolition of Contracting Out for Defined Contribution Pension Schemes
Defined contribution (money purchase) pension schemes will no longer be able to be used to contract out of the Second State Pension on a protected rights basis from 6th April 2012. Broadly, all direct contribution contracting-out certificates will be cancelled and scheme members will be contracted back into the Second State Pension with effect from this date (section 106 Pensions Act 2008 and related secondary legislation).
Pension scheme trustees have an obligation to inform members as soon as practicable, and in any event within one month of 6th April 2012 that the scheme is no longer a money purchase contracted-out scheme, and to then provide the member as soon as practicable, and in any event within four months of 6th April 2012 with prescribed information in relation to this change.
Employers with employees who are contracted out by reference to a defined contribution scheme may also have a similar obligation under the Employment Rights Act. If you currently operate a contracted-out defined contribution pension scheme please let us know and we can advise further on the implications of this change and what needs to be done in practice.
RIDDOR reporting time limits increase
Where an employee is unable to do their job because of an accident sustained at work the employer is required, by the Reporting on Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR), to report the injury to the relevant enforcing authority within a set period.
As from 6 April, the period of incapacity of the employee which triggers the employer’s duty to make such a report will increase from 3 consecutive days to 7 consecutive days. In addition to this, the period for the report to be made by the employer will increase from 10 to 15 days.
You should be aware that you will only be required to make a report to the relevant authority under RIDDOR once an employee has been absent because of an injury sustained at work for 7 consecutive days. You should also be aware that the length of time you have to make such a report will increase. However, this should not affect the policy currently in place and you should make any such report as soon as possible to ensure that you are within the time limit.
Increased statutory rates
(a) Maternity/ Paternity/ Adoption Pay Increase
Maternity, paternity and adoption pay will increase from £128.73 a week to £135.45 per week from 1 April. The weekly earnings threshold for the payments will also rise from £102 to £107.
(b) Statutory Sick Pay Increase
Statutory sick pay will increase from £81.60 to £85.85 per week from 6 April. The weekly earnings threshold will also increase from £102 to £107.
(c) Maternity Allowance Increase
Maternity allowance will increase from £124.88 to £135.45 from 9 April. The weekly earnings threshold will remain at £30.