We reported on the changes which were expected to take place this month in our March eBulletin and the following important changes have now taken effect:
1. Introduction of the National Living Wage
On 1 April 2016 the national living wage (the "NLW") was introduced. This is a premium which is added to the national minimum wage for workers aged 25 and over and is currently set at 50p. Therefore, the current national living wage is £7.20 per hour.
The national minimum wage rates will rise in October.
2. Financial penalties
The system of financial penalties for employers who do not pay awards ordered by an employment tribunal is now in place. The maximum penalty for a failure to pay an award is £5,000.
3. Employment tribunal procedure
From 1 April the new rules on postponements in the employment tribunal came into force. Moving forward, only two requests for postponements can now be made by each party unless there are exceptional circumstances. In addition, any requests should be made at least 7 days before the hearing, or at the hearing, will only be granted in exceptional circumstances.
4. Increase in Employment Tribunal compensation limits
From 6 April 2016 the maximum compensatory award for a standard unfair dismissal claim increased from £78,335 to £78,962 and a week's pay increased from £475 to £479. A week's pay is used to calculate statutory redundancy payments and the basic award in unfair dismissal cases.
5. Repayment of public sector exit payments
The Repayment of Public Sector Exit Payments Regulations 2016 were due to take effect on 1 April. However, at the time of writing it appears the Regulations have not been laid before Parliament. These are the Regulations intended to prevent public sector employees receiving large payouts on leaving their jobs only to return to a public sector role a short time later. The Regulations will apply to employees with annual salaries of £80,000 or more and will require them to repay some or all of their exit payment if they return to public sector employment within 12 months of their exit. Provisions are also expected to come into force later in the year limiting public sector exit payments to £95,000.
There have also been some important developments in other areas.
Employment Tribunal fees
The Supreme Court announced on 26 February 2016 that they were granting permission to UNISON to appeal against the decision of the Court of Appeal that Employment Tribunal fees are not unlawful. UNISON had argued before the Court of Appeal, that the fees prevent access to justice and are indirectly discriminatory. However, the Court of Appeal held that there was inadequate evidence to support these claims.
Trade Union Bill
The Trade Union Bill 2015-16 is still making its way through the legislative process with the report stage beginning on 16 March 2016. The passage of the Bill has not been without its difficulties and as a result, the Government proposed a number of concessions in an attempt to make the other wide ranging reforms more palatable. These amendments were approved by the House of Lords at report stage and include that:
- Workers who the union reasonably believe are not normally engaged in the provision of important public services at the time of a ballot will be excluded from the new 40% threshold for ballots in important public services;
- A 7 day notice period of industrial action will be enough if the employer agrees (it had been proposed that this would be increased to 14 days);
- Industrial action must take place within 6 months of a ballot or 9 if the employer agrees, as opposed to 4 months;
- Industrial action ballot papers will only need to set out a summary of the dispute rather than a reasonably detailed explanation.
In addition, further amendments were approved at the report stage, including some which will allow e-balloting to be introduced in the future.