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Employment law changes- what you need to know?

April is one of two months when legislative changes are traditionally made. This year is no exception, with a number of new employment laws being introduced. Whilst these changes are important, helpfully for employers, few of them will create any significant consequences in terms of day to day HR practice. Given the volume of changes made over the past few years as a result of the government’s “red tape review”, this is to be welcomed.

The most noteworthy changes (all of which took effect on 6th April) are as follows:

  • Statutory discrimination questionnaires have now been abolished. These were used by employees who believed that they may have been discriminated against by their employer in breach of the Equality Act. The questionnaires could be completed and submitted to the employer, requesting answers to questions and information which would allow the employee to consider whether or not any discrimination claim had merit. Their removal is somewhat surprising as there appeared to be no real objection to their use by trade bodies or employers.  While the formal statutory procedure has now been revoked, employees can still ask questions of their employers where they believe discrimination has taken place and ACAS have produced a guide which fills the gap that has been left. A failure to answer the questions posed can allow an employment tribunal to draw adverse inferences in any subsequent claim.
  • Certain statutory payments have been increased. The new rates are:
Statutory Sick Pay £87.55 per week
Maternity/ Paternity/ Adoption pay £138.18 per week
  • Perhaps the most significant practical change that has been introduced is that of employers no longer being able to recover amounts of statutory sick pay (“SSP”) from the government. Previously, a Percentage Threshold Scheme was in place which allowed employers to reclaim payments of SSP for any particular month where the total SSP paid exceeded 13% of the employer’s total Class 1 National Insurance contributions for that month. Whilst transitional measures are in place which will allow employers to recover SSP payments made in respect of days of incapacity falling before 6th April, any absences falling after that date will be subject to the new rule.
  • The increase to other certain statutory payments will also come into effect on 6th April. These were set out in our previous blog posting which can be found here.

The remainder of the changes made all relate exclusively to employment tribunal practice and procedure:

  • The ACAS Early Conciliation (“EC”) scheme will require any employee who wishes to pursue an employment tribunal claim against their employer (or former employer) to notify ACAS of their complaint in the first instance. A failure to do this will act as a bar to their being able to lodge an application with the tribunal service. EC will apply to almost all forms of employment claims, with only minor exceptions.  In practice, EC requires the employee to contact ACAS (by letter, online or by phone) to advise them of their wish to pursue a claim, providing details of the prospective respondent(s). ACAS will then have a duty to make efforts to try and conciliate the claim with a view to tribunal proceedings being avoided. As with previous efforts to promote early resolution of complaints (most obviously the Statutory Dispute Resolution Procedures which were revoked in April 2009), time will tell whether EC fulfils its purpose.  Our blog next week will discuss EC in greater detail.

At present, EC is only voluntary and employees will not be under any absolute duty to contact ACAS until 6th May 2014. EC becomes mandatory for any claim that is to be presented on or after that date.

  • Employment tribunals will now have the ability to impose financial penalties on employers who have been found to have breached a claimant’s employment law rights and that breach has one or more “aggravating features”. In plain terms this will mean that where an employer loses a claim before the tribunal, they will be at risk of such a fine being imposed. A tribunal does not need to impose a fine automatically; it will have a discretion as to whether to do so.

The fine will not result in successful employees receiving additional compensation; rather, the monies will be payable to HM Court & Tribunals Service, with the measure being a further effort by the government to reduce the running costs of the tribunals service.

There is no exhaustive list as to what will amount to an “aggravating feature”, with tribunals having a discretion to take account of any matter which it believes to be relevant. This will differ from case to case. However, the following are likely to be the most common factors which are in a tribunal’s contemplation:

  • The size and resources of the employer (e.g. does the employer have a dedicated HR function?);
  • The extent of the breach of the employee’s rights; and
  • The general behaviour of the employer and the employee (e.g. has the employer acted maliciously?).

Where a tribunal elects to impose a fine, this will be 50% of the financial compensation awarded to the successful employee (subject to a minimum fine of £100 and a maximum of £5000). However, if the fine is paid within 21 days, the employer will receive a 50% discount (i.e. will only have to pay 25% of the compensation awarded to the employee).

  • Certain types of claim have been reclassified and will now require claimants to pay an increased lodging and hearing fee. This will apply to claims for equal pay, sex equality in pension schemes, failure to inform or consult under TUPE, failure to allow compensatory rest under the Working Time Regulations 1998 and a breach of the right to request time off for training. All other claims will still attract the same fees as were set out when the fee regime was introduced.

The only other change on the immediate horizon will come into effect on 1st May 2014 and relates to the Transfer of Undertaking (Protection of Employment) Regulations. From that date, a transferor will require to provide the transferee with all employee liability information (as required under regulation 11 of TUPE) relating to the employees working in the undertaking that is to transfer, at least 28 days in advance of the transfer date. This doubles the present notice required.

As always, if any of the above raises any issues for you or your business, we would be happy to assist.