2013 The year ahead in employment law

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Happy New Year! This is our first HR briefing of 2013 – in it, we focus on what to expect in employment law in the year ahead. It looks set to be another busy year!

January 2013 and each month onwards

Auto-enrolment - the new law on workplace pensions was implemented for the largest employers from 1 October 2012. Every month, more employers will reach their staging date and by the middle of 2014, the majority of EEF members will have to comply with the new law. In Spring 2013 we will be delivering a further series of seminars to our members to explain the new obligations and give clear advice on getting ready for the new law. Look out on the website for details of these seminars.

February 2013

Statutory limits increase :

      • The limit on a week’s pay for statutory redundancy pay purposes and the basic award will increase from £430 to £450
      • The limit on the maximum compensatory award for unfair dismissal will increase from £72,300 to £74,200
      • Statutory guarantee payments will increase from £23.50 a day to £24.20
      • The minimum basic award in cases where the dismissal was unfair for health and safety, employee representative, trade union or occupational pension trustees reasons will increase from £5,300 to £5,500

March 2013

Parental leave to increase from 13 to 18 weeks - the permitted period of unpaid parental leave following the birth or adoption of a child increases from 13 to 18 weeks per parent per child.

Changes to the Equality Act - statutory discrimination questionnaires will be abolished and employers’ potential liability for harassment by third parties will be removed.

April 2013

Collective redundancy consultation periods to be reduced - the current 90-day minimum consultation period will be reduced to 45 days for planned redundancies of 100 or more employees. In addition, fixed-term contracts which reach their agreed termination date will be exempted from the collective redundancy consultation obligations. Accompanying ACAS guidance should be available by this date too.

‘Shareholder-owner' contracts to be introduced - shareholder-owners will be given between £2,000 and £50,000 of shares in a business which will be exempt from capital gains tax in exchange for foregoing certain employment rights (the key ones being - no right to ‘ordinary’ unfair dismissal after two years’ continuous service, no right to make a statutory request to work flexibly, no eligibility for statutory redundancy payment, requirement to give 16 rather than the usual 8 weeks’ notice to return early from maternity or adoption leave). Initial feedback suggests there will be minimal take-up amongst our members.

Whistleblowing legislation to be amended so that a disclosure will not be protected unless the disclosure is made in the public interest (currently, employees who complain about breaches of their own contracts of employment can be protected under the legislation).

Reform to the Employment Tribunal Rules following Mr Justice Underhill’s detailed review of the rules of procedure for employment tribunals.

Statutory payment rates - statutory maternity, paternity and adoption pay will rise from £135.45 to £136.78 per week and statutory sick pay will increase from £85.85 to £86.70 per week.

Also likely in 2013

The Government also plans the following for 2013, but the precise timescales are currently unknown.

Although the right to request flexible working will be extended to all employees with at least 26 weeks’ employment, this will not happen until April or October 2014. The statutory procedure for considering requests will change and employers will be obliged to consider requests in a reasonable manner, within a reasonable period of time. To this end, a statutory Code of Practice will be issued and we understand that a consultation on the Code is likely to be published in February 2013.

Flexible parental leave (which can be taken by both parents consecutively or concurrently) will be introduced in 2014 – but, again, we expect a consultation on a Code of Practice on the administration of flexible parental leave in February 2013. Parents will be able to share 50 out of 52 weeks of statutory maternity leave and 37 out of 39 weeks of statutory maternity pay.

Mandatory pre-claim conciliation – all claims to be submitted to ACAS for conciliation before they can progress to the employment tribunal.

Renaming compromise agreements as ‘settlement’ agreements to enable full and final settlement of all claims and remove unnecessary complexity.

Protected conversations – these would allow employers to open dialogue with employees about underperformance without fear of this being used in evidence against them in a claim of unfair dismissal at an employment tribunal. EEF has lobbied the government for protected conversations to be enabled in a wide range of scenarios, not simply in the context of underperformance.

Rapid resolution scheme introduced - to provide a quicker and cheaper way of dealing with low value straightforward tribunal claims.

Financial penalties for employers who lose tribunal claims, although these will be at the discretion of the tribunal rather than automatic.

Compensatory award limit for unfair dismissal amended - the maximum amount of the unfair dismissal compensatory award is likely to be amended and the formulae for uprating various tribunal awards and statutory redundancy payments will be changed.

A revised version of the Working Time Regulations to deal with the various European Court of Justice decisions on sickness and holidays.

Periods after which convictions become spent to be reduced - the government proposes to reduce the period of time after completing their sentence that some offenders are required to declare their conviction to prospective employers. However, the new rehabilitation periods will start from the point an offender completes his or her sentence, rather than at the date of conviction.

Simplifying dismissal/poor performance procedures which might include changes to the ACAS Code.

Fees for ET claims to be introduced – we understand that these are likely to be introduced in the Summer of 2013.

Compulsory pay audits - Employment tribunals will be given the power to order pay audits where an employer is found guilty of gender discrimination in relation to pay matters.

Keep an eye on our website – we will keep you posted on any further developments throughout the coming year.

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Media Team 020 7654 1576

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