Employment Law Newsletter Spring 2012

With the arrival of spring (nearly), we focus on the changes proposed by the Coalition government to reform employment law with the stated aim of assisting business and boosting economic recovery.

Qualifying period for unfair dismissal to rise to two years – Draft Order published

The government has published the draft Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012. The Order will increase the qualifying period to claim unfair dismissal from one year to two years. It will also increase the qualifying period for entitlement to written reasons for dismissal, from one year to two years. These changes will come into force on 6 April 2012, subject to Parliamentary approval.

The changes will only affect new joiners whose employment begins on or after 6 April 2012.

Employment judges to sit alone in unfair dismissal claims – Draft Order published

Also recently published is the draft Order providing that unfair dismissal proceedings will be heard by an employment judge sitting alone without lay members unless, for specified reasons set out in the legislation, the judge considers the proceedings should be heard by a full tribunal.

Other changes planned for April 2012 include:

Costs awards: The maximum amount of costs an employment tribunal can award (without referring the case to the county court for detailed assessment) will increase from £10,000 to £20,000.

Deposit orders: The amount of deposit order a tribunal will be able to order a party pay will increase from £500 to £1,000.

Parental Leave: Unpaid parental leave is to increase to 4 months

Holiday: Working time rules to be amended to allow holiday to be carried forward in limited circumstances

Other changes the government intends, although no date has been set for implementation include:

Early Acas conciliation: Under the proposals, claimants will be required to submit details of their dispute to ACAS first, at which point they will be offered pre-claim conciliation for a period of one month. If conciliation is refused by either party, or is unsuccessful, the claimant will be able to go ahead and present their claim to the tribunal. If the parties enter into pre-claims conciliation this will “stop the clock” on the limitation period to present the claim to the tribunal. If conciliation is unsuccessful, the clock then re-starts, but with not less than a month still on it.

Financial penalties for employers: The government intends to introduce financial penalties for employers who lose at tribunal at the levels proposed in the consultation: half of the total award made by the tribunal, with a minimum threshold of £100 and a maximum cap of £5,000. Where a non-financial award is made, the tribunal will be able to ascribe a monetary value. The penalty will be reduced by 50% if paid within 21 days. However, the levy of a financial penalty will be at the tribunal’s discretion; it will not be automatic. The penalty is paid to the Exchequer, not to the claimant.

Fees: Also proposed, the introduction of court fees in tribunal claims. One option is for a fee to be charged when the claim is made (the ‘issue fee’) and before the case is heard (the ‘hearing fee’), the level of the fee depending on the nature of the claim, for example a wages claim will be Level 1 with an issue fee of £150; discrimination claims will be Level 3 with an issue fee of £250. Under option 2, there will be one main charging point at the issue of claims only.

Reminder: New statutory payment rates and tribunal limits take effect
On 1 February 2012, the rates of certain statutory payments and the limits applying to some employment tribunal awards increased. The maximum compensatory award for unfair dismissal rose from £68,400 to £72,300 and the maximum amount of a week’s pay, used to calculate statutory redundancy pay (among other things), rose from £400 to £430.

Knight-Webb Solicitors are specialists in employment law. We pride ourselves in providing a first-rate, cost-effective and personal service to clients. We can advise you on employment law matters, taking into account all the recent changes in the law, including those outlined in this Newsletter.

Contact Knight Webb Solicitors

Contact Sunita Knight-Webb on 020 7207 6195 or at sunita@knightwebb.com