Changes to employment law in 2012
There will be two significant changes to employment law in 2012 which employers need to be aware of – the increase in the qualifying period to claim unfair dismissal and the requirement to auto-enrol workers into a pension scheme. In addition, the Government is also conducting a wholesale review of major areas of employment law and it is likely that we will get more details about these radical proposals during the course of 2012.
Given the raft of changes proposed by the Government, it is therefore more important than ever that employers keep up to date with changes to employment law. This will enable employers to prepare for their introduction and ensure compliance to reduce the risk of an Employment Tribunal claim being brought against them.
Howes Percival has provided a more in-depth analysis of each new employment law below:
February 2012
New compensation limits will come into force on 1 February 2012
- The maximum amount of a 'week's pay' for calculating the basic award for unfair dismissal and statutory redundancy payments increases from £400 per week to £430 per week.
- The maximum compensatory award for unfair dismissal increases from £68,400 to £72,300.
- The maximum amount of guarantee payments which is payable to an employee increases from £22.20 per day to £23.50 per day.
The new limits apply where the date of dismissal or other event (e.g. lay off) takes place on or after 1 February 2012.
April 2012
Increase in the qualifying period for unfair dismissal claims.
The qualifying period for employees to claim unfair dismissal will increase from 1 year to 2 years in April 2012. However, at the time of writing, we do not yet know the exact date this will come into force. Neither do we know whether the new 2 year qualifying period will only affect employees who begin work after April 2012 or will affect all existing employees.
Given that the Government intends this increase to come into force in April, we expect them to publish draft Regulations which will give more details about the increased qualifying period in the New Year and we will send out a further newsflash when this information is available.
Increases to statutory payments
Statutory maternity, paternity and adoption pay will increase from £128.73 per week to £135.45 per week. The rate of Statutory Sick Pay will increase from £81.60 per week to £85.85 per week.
Changes to Employment Tribunal practice and procedure
A number of changes to the way employment cases are conducted in Tribunal are expected to come into force in April including:-
- The maximum cost of a deposit order will rise from £500 to £1,000.
- The maximum amount of costs an Employment Tribunal can award will increase from £10,000 to £20,000.
- At Tribunal hearings witnesses will no longer be required to read out their statements.
- State funded expenses for witnesses attending Tribunal hearings will be withdrawn.
- Employment Judges will hear unfair dismissal cases on their own (i.e. without the two lay members).
October 2012
With effect from October 2012, the Pensions Act 2008 will require employers to auto-enrol their workers into a pension scheme and make minimum contributions to that scheme. The requirement to automatically enrol workers into a pension scheme will be phased in over a 4 year period. We will provide further updates on the staging timetable for implementation via our Newsflash service as soon as they become available.
Ongoing Consultations in 2012
The Government is currently conducting a number of reviews into employment law with several consultations likely to run simultaneously throughout 2012. The key ones are:-
Consultation on the introduction of fees in Employment Tribunals
The Government launched this consultation on 14 December 2011 and it will close on 6 March 2012. In the consultation the Government proposes two alternative fee systems, one based on paying an issue fee of between £150 and £250 and then a hearing fee of between £250 and £1,250 and the other proposal is based on how much the claimant is seeking in compensation with fees ranging from £200 to £1,750.
The current fee remissions system used in other civil courts for individuals in receipt of certain benefits or on a low income, will apply to both proposed fee schemes in the Employment Tribunal.
Consultation on Modern Workplaces
The Government launched this consultation in May 2011 and it covers proposals for a new system of parental leave, extending the right to request flexible working, giving Employment Tribunals the power to order employers found guilty of pay discrimination to carry out equal pay audits and allowing employees to carry over statutory holiday in cases of sickness absence and maternity/paternity/adoption leave.
The consultation closed on 8 August 2011 and the Government confirmed in December that it will publish its response in early 2012.
A 'call for evidence' in respect of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and collective redundancy consultation
This is a Government request for information about the effects of reducing the current 90 day period for collective redundancy consultation to 60, 45 or 30 days and the effectiveness of the service provision aspects of TUPE. Both, 'calls for evidence' close on 31 January 2012. The evidence gathered will be used to draft proposals which the Government will then publish for formal public consultation.
Protected conversations, compromise agreements and a Rapid Resolution scheme
The Government has stated its intention to consult on the introduction of protected conversations (which the Government claims will enable employers and employees to have a 'frank conversation' without the fear of being taken to an Employment Tribunal); making compromise agreements simpler (possibly by introducing set wording) and a Rapid Resolution scheme to provide a quicker and cheaper way of determining straightforward low value employment claims (such as holiday pay). However at the time of writing the Government has not confirmed when these consultations will take place, although it is expected that they will occur some time during 2012.
Posted by: Howes Percival
