Employment Law in 2012: What to Expect
Posted: Wednesday 11 January 2012
Last year was a reasonably busy year on the employment law front, with the Agency Workers Regulations coming into force and the implementation of the Bribery Act. So, what does 2012 have in store employment law-wise?
Increase in Employment Tribunal Award Limits
As of 1 February 2012 the position will be as follows:-
- maximum unfair dismissal compensatory award £72,300 (increased from £68,400)
- maximum week's pay £430 (increased from £400 -- this figure is used for calculating statutory redundancy payments and the basic award in an employment tribunal)
This now means that the maximum unfair dismissal award will be £85,200 (maximum basic award plus maximum compensatory award).
There will however still be no limit to the amount that can be awarded for unfair dismissal for certain health & safety and whistleblowing reasons. In addition, there is no limit to the amount that can be awarded for discrimination claims.
Family Friendly & Sick Pay Rates
From 9 April 2012, statutory sick pay will increase to £85.85 from £81.60 and statutory maternity, paternity, additional paternity and adoption pay will increase to £135.45 from £128.73.
Increase in National Minimum Wage
Although this has not yet been announced, in keeping with previous years it is expected that the National Minimum Wage will increase with effect from 1 October 2012.
Pension Changes
October 2012 sees the implementation of auto-enrolment for pensions. Although auto-enrolment commences on 1 October 2012, duties upon employers will be staggered over four years, starting with large organisations. Once auto-enrolment is implemented, all employers will be required to automatically enrol eligible job holders into an appropriate pension scheme.
Employment Law Reform
The main topic of employment law conversation for 2012 will likely be the many reforms proposed by the Government. The main changes proposed include increasing the qualifying period for unfair dismissal claims from one to two years, allowing (or certainly making it easier for) employers and employees to have frank discussions about any employment issues, and a revamp of the Employment Tribunals system.
Qualifying Period for Unfair Dismissal Claims
The qualifying period for raising a claim of unfair dismissal is set to increase from one to two years from April 2012. However, it is important to note that some claims for unfair dismissal do not require a year’s continuous service and certain claims will still be capable of being brought from day one of the employment relationship. Dismissals relating to discrimination, whistleblowing, exercising certain statutory rights, and health & safety-related reasons are not covered by the qualifying period and claims can be brought from the outset of the relationship – this will not change from April.
Fees
Consultation has begun on proposals to introduce a fee structure in the Employment and Employment Appeal Tribunals.
Currently, Claimants are not required to pay to raise a claim or an appeal with the Employment Tribunals or the Employment Appeal Tribunals Office. The current consultation seeks views on two proposed fee charging schemes:
Firstly, that the level of fees charged will depend upon the nature of the claim and the stage proceedings reach. Two fees would be payable by the Claimant, one at the time the claim is lodged and the second for claims proceeding to hearing. For single claims, the initial fee would be between £150 and £250 and the hearing fee would be between £250 and £1250 depending on the type of claim. Once a claim has been accepted, six further fees would be charged for certain specified applications, for example a request for written reasons or a counterclaim.
The second proposal is that one main fee would be paid by the Claimant when the claim is raised, regardless of whether or not the claim progresses to a hearing. For a single claim, it is proposed that the fee would range between £200 and £1,750 depending on the amount being claimed. As above, six further fees for certain applications would be payable. It is proposed that for those Claimants seeking an award of over £30,000, the fee would be substantially higher than for Claimants who were seeking a significantly lesser sum.
For the Employment Appeals Tribunal the fee structure proposed is similar to option one above, with the proposed initial fee being £400 with a hearing fee of £1,200.
The consultation, which closes on 6 March 2012, seeks views on the proposal that the fees could be reimbursed by the unsuccessful party to the successful party should the Tribunal consider this to be appropriate.
Costs Awards and Deposits
Currently Employment Tribunals may award up to £10,000 in costs (or expenses in Scotland) against the unsuccessful party at a hearing, although this is rarely exercised in practice. It is proposed that, from April, the maximum amount of costs which could be awarded by the Tribunal will increase to £20,000.
If an Employment Judge considers that all or part of a claim (or a response) has little reasonable prospect of success, he or she may make an order requiring that party to pay a deposit of £500 or less as a condition of being permitted to continue to take part in the proceedings. As part of the reform, from April the amount of deposit a Tribunal can order a party to pay will increase to £1,000.
Panel Members
Unfair dismissal hearings are heard by an Employment Judge and two lay members. From 1 April 2012 an Employment Judge will hear unfair dismissal cases alone unless the Employment Judge directs otherwise. This change will be reviewed after a year in order to see how successful this is in practice.
Witnesses
Currently, witnesses can apply to the Employment Tribunals Office to be reimbursed for the expenses incurred in attending a hearing. From April, this procedure will be withdrawn and the Tribunal will be able to direct parties to bear the cost of witness attendance, including the cost of witnesses called by the successful party.
Another change to come into force in April is in relation to witness statements. This will apply to Tribunals in England and Wales where it is standard practice to use witness statements at hearings. From April, witness statements will be taken as read at the Employment Tribunal unless directed otherwise by a Judge. The position in Scotland will remain unchanged as witnesses are usually required to give oral evidence without the use of witness statements.
ACAS Conciliation
It is also proposed that prior to submitting a Tribunal claim, a Claimant will require to submit details of their complaint to ACAS. Parties would then be offered pre-claim conciliation for a period of one month. In terms of time limits, if both parties agree to enter into pre-claim conciliation then effectively the three month time limit for submitting claims will be paused and the Claimant will have a month after the conclusion of pre-claim conciliation to present their claim to the Tribunal.
Flexible Working
With regard to parental leave this will increase from 13 weeks to 18 weeks, possibly as early as April. In addition, the Government are proposing extending the time period in which this must be taken by. At present the leave must be taken before the child reaches the age of five. Remember though that unless the contract of employment says otherwise this time off is unpaid.
It is also proposed that the right to request flexible working is extended to all employees who have 26 weeks’ continuous employment, regardless of whether or not they have children. Under the proposals, employers would be under a duty to consider requests ‘reasonably’. A time frame has not been suggested in relation to this flexible working change, and this remains a proposal only.
Protected Conversations
Consultation is underway on introducing a system of “protected conversations” to allow employers to raise issues such as poor performance or retirement plans in an open way, free from the worry that it will be used as evidence in a subsequent tribunal claim.
Simplifying Compromise Agreements
Consultation will commence on simplifying compromise arrangements, to enable two sides to reach a no-fault settlement in exchange for an agreement not to bring future claims. A standard text “settlement agreement” is proposed. In addition, the Government intends to rectify the issue relating to the wording of section 147 of the Equality Act which has caused some confusion as to whether discrimination claims can be compromised.
For more details and a link to the Government’s paper on this see Innes Clark’s Employment law blog:-
Major Employment Law Reform Proposed
Conclusion from Innes Clark:
That concludes the overview of what is expected in 2012: it goes without saying that there are certainly a number of major reforms proposed. Whether or not all of these changes will be implemented remains to be seen, but 2012 is shaping up to be an interesting year.
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