An updated calendar of recent and proposed changes in employment law and of current consultations.
Tuesday 15 May, 2012
An updated calendar of recent and proposed changes in employment law and of current consultations
EMPLOYMENT LAW CALENDAR – A MONTH BY MONTH GUIDE
FEBRUARY
New compensation limits take effect
The maximum compensatory award for unfair dismissal increased from £68,400 to £72,300 for all dismissals taking effect on or after 1 February. The maximum limit on a week’s pay increased from £400 to £430 on the same date. For employment law facts and figures see our Employment Law Essentials.
MARCH
Government reports on progress on Red Tape Challenge
In April 2011 the Government launched its Red Tape Challenge aimed at reducing regulatory burden on business. In October, the spotlight fell on employment law and employers and employees were asked to comment on employment laws which could be simplified, better implemented or enforced or abolished altogether.
In March 2012 the Government published its Employment Law Review Annual Update outlining its progress on employment law reforms to date and looking ahead at other areas it is proposing to consider as part of the Review.
APRIL
Unfair dismissal qualifying period increased to two years
The period of service needed to bring an unfair dismissal claim increased from one to two years with effect from 6 April. At the same time, the qualifying period that applies to the right to receive a written statement of reasons for dismissal, upon request, also increased to two years. The changes only affect those whose employment commenced on or after 6 April and not those already employed at that date.
Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012
Changes to the employment tribunal rules of procedure came into effect
The following changes to the employment tribunal rules of procedure came into effect:
The Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2012 amend the employment tribunal rules of procedure and the amended rules will apply in respect of claims submitted to the employment tribunal on or after 6 April 2012.
Judges can hear unfair dismissal claims sitting alone
Unfair dismisssal claims will now be heard by a Judge sitting alone. There will still be some scope for unfair dismissal claims to be heard by a panel of three, for example if there is a factual dispute between the parties which might make this desirable, if it is being heard alongside another claim which requires a panel of three, such as a discrimination claim, or if the tribunal considers it appropriate based on the views of the parties. The change applies where the hearing takes place on or after 6 April 2012.
Employment Tribunals Act 1996 (Tribunal Composition) Order 2012
Statutory payments increase
New rates for statutory payments took effect as follows:
The changes apply to complete pay weeks commencing on or after 1 April 2012, or 6 April 2012 in the case of statutory sick pay.
Decrease in lifetime pensions allowance
The lifetime pensions allowance (the total amount of pension savings by an individual that receives favourable tax treatment) decreased from £1.8 million to £1.5 million.
Abolition of contracting out
The Government abolished contracting out of the additional state pension from 6 April. The changes mean that contracting out is no longer possible through:
Employees who were contracted out through one of these schemes on 6 April 2012 will automatically be brought back into the additional state pension and begin to build up an additional state pension. See our update for further information.
Introduction of minimum pay threshold for skilled workers wishing to settle in the UK
The Government has introduced a minimum pay threshold of £35,000 for skilled workers, who have entered and work in the UK under Tier 2, and wish to settle in the UK. The threshold applies to Tier 2 migrants applying for settlement from April 2016 (i.e. those who entered the UK under the rules in force from 6 April 2011).
In addition, temporary leave to remain in the UK as a skilled worker has been limited to a maximum of six years. This applies to those workers who entered the UK under Tier 2 after 6 April 2011.
The necessary changes to the Immigration Rules came into force on 6 April 2012.
MAY
The Sunday Trading (London Olympic Games and Paralympic Games) Act
The Sunday Trading (London Olympic Games and Paralympic Games) Bill received Royal Assent on 1 May 2012.
Large shops (those with a floor area of over 280 square metres) in England and Wales will not be subject to normal restrictions on Sunday Trading between 22 July and 9 September. Shop workers will retain existing rights to opt out of Sunday working but in view of the short timetable the period of notice they must give to opt out is reduced from the usual three months to as little as two months, depending on when notice is given. Reduced periods apply to those opting-out between 1 May and 9 July 2012. The Government’s Guidance on the effect of the Sunday Trading (London Olympic and Paralympic Games) Act 2012 on the existing rights of shop workers to opt out of Sunday working provides further information on the precise notice periods that apply during this period.
JUNE
Extra bank holiday for Queen’s diamond jubilee
The late May bank holiday moves to Monday 4 June and the extra bank holiday for the Queen’s diamond jubilee is the following day on Tuesday 5 June. For information on whether your staff are entitled to take paid holiday on the extra bank holiday see The Queen's Diamond Jubilee and Bank Holidays.
Deadline for response to call for evidence on dealing with dismissal and "compensated no-fault dismissal" for micro businesses
See below under Consultations for further information.
OCTOBER
Larger employers subject to new pensions duties
1 October is the first staging date for larger employers (those employing 250+) to comply with their new pensions duties. They have to:
Also from 1 October, all employers, irrespective of their size, are subject to the legal safeguards designed to protect workers exercising their pension rights. These prevent employers asking questions about whether a worker intends to exercise their right to join a pension scheme, prevent them offering financial inducements to workers not to join a pension scheme and prevent them subjecting a worker to a detriment, or dismissing an employee, on grounds related to the new pensions duties.
Increase in national minimum wage rates
The annual increase in national minimum wage rates take effect. The Government has confirmed that the adult rate will rise to £6.19 and the apprenticeship rate to £2.65 on 1 October 2012. The rate for 16-17 year olds will remain unchanged at £3.68 and for 18-20 year olds will remain unchanged at £4.98.
For current rates see our Employment Law Essentials.
Amendments to UK Corporate Governance Code: gender diversity on boards
Two changes to the UK Corporate Governance Code come into effect for financial years beginning on or after 1 October. These require listed companies to:
UNSPECIFIED
Independent sickness absence review
The Chancellor indicated in his 2011 Autumn Statement that the Government would be responding in 2012 to the recommendations made by Dame Carol Black and David Frost in their Independent Review of Sickness Absence.
Health at work – an independent review of sickness absence
CONSULTATIONS IN 2011
Dealing with dismissal and compensated no-fault dismissal for micro businesses
(Status: open)
In March 2011, the Government issued a call for evidence asking employers how existing dismissal processes might be made simpler, quicker and clearer. It wants to understand if the Acas Code of Practice on Discipline and Grievance could be adapted to make it easier to use and more accessible to smaller businesses. As part of the same call for evidence the Government is also seeking views on the concept of “compensated no-fault dismissal” for businesses employing fewer than 10 employees.
Responses to the call for evidence on dealing with dismissal and compensated no-fault dismissal for micro businesses have to be made by 8 June 2012.
Consultation on shareholder voting rights on executive remuneration
(Status: Closed awaiting response)
In September 2011, the Government published a discussion paper on the governance of executive remuneration in quoted companies. It sought views on the alignment of pay with long-term company performance.
The consultation closed on 25 November 2011. In January 2012 Vince Cable announced to Parliament the Government's plans for curbing executive pay in response to the discussion paper. Proposals included:
In March 2012 the Government issued a consultation paper on its proposals to give shareholders a greater influence over executive remuneration, in order to promote a stronger link between pay and performance. Proposals include an annual binding vote on future remuneration policy, increasing the level of support needed for votes on future remuneration policy, an annual advisory vote on how remuneration policy has been implemented and a binding vote on exit payments over one year’s salary. The Government announced in the Queen's speech that these measures would be included in the Enterprise and Regulatory Reform Bill.
TUPE and collective redundancy consultation laws
(Status: Closed awaiting response)
In November 2011, the Government issued a call for evidence asking employers for details of their experiences of operating within current collective redundancy consultation and TUPE laws and the difficulties faced. It is concerned that some businesses believe current laws are overly bureaucratic and "gold-plated" and is considering whether they should be amended.
Responses to the call for evidence on collective redundancy consultation and the call for evidence on TUPE had to be made by 31 January.
If changes are required, a formal consultation will take place in 2012.
Bank executive remuneration disclosure
(Status: Closed awaiting response)
In December 2011, the Government issued a consultation on measures aimed at tackling unacceptable bank bonuses by improving transparency. The proposals would require the eight highest paid non-board executives with responsibility for managing risk to disclose their remuneration arrangements.
Responses to the Merlin Executive Remuneration Disclosure consultation were required by 14 February 2012.
Tax treatment of legal fees on termination
(Status: Closed awaiting response)
In December 2011, HMRC confirmed that it would be amending tax legislation to make it clear that the tax exemption available where an employer pays an employee’s legal fees pursuant to a settlement agreement applies to all settlement agreements. This follows concerns that when the previous extra-statutory concession on legal fees was replaced with legislation, it was narrower in scope than previously had been the case. The consultation concerns the wording of the proposed amendments.
Responses to the Consultation were required by 28 February.
Employment tribunal fees
(Status: Closed awaiting response)
In December 2011, the Government issued a consultation on charging fees in employment tribunals.
It has decided to introduce fees for bringing employment tribunal claims and is consulting on the charging structure and the level of the fees. Under the first option fees would be payable on issue and before the hearing, whereas under the second option a fee would only be charged on issue. Under both options fees would be payable for applications made during proceedings.
Responses to the Consultation were required by 6 March.
Modern workplaces
(Status: Closed awaiting response)
In May 2011 the Government launched a consultation on its plans for a culture of flexible, family-friendly employment practices. The consultation closed on 8 August 2011.
Proposals included:
In February 2012 the Government announced that it would be responding to the consultation early in the Spring of 2012. The Government announced in the Queen's Speech that flexible parental leave would be included in the Children and Families Bill.
Exceptions to the Age Discrimination Ban for Goods and Services
(Status: Closed awaiting response)
In March 2011 the Government Equalities Office launched a consultation to identify exceptions to the prohibition of age discrimination in the provision of goods and services, the exercise of public functions and by private clubs and other associations.
The Consultation closed on 25 May 2011.
The ban was due to come into force in April 2012 but this has been postponed and is now unlikley to come in before October 2012.
This calendar is updated throughout the year and more details will be made available on the website once they becomes known.
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