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Forthcoming employment law reforms

From the summer of 2013, a number of major changes are set to be implemented in employment law, as announced by the Department for Business Innovation and Skills.  This article summarises the key developments.

Employment law changes due summer 2013
The following changes that will effect the business law landscape for employers are due to come into force in summer 2013:

  • Protected settlement conversations: new rules will mean that any offers or discussions about settlement agreements cannot be used as evidence in an unfair dismissal claim, unless either of the parties has engaged in some improper behaviour. The Acas Code will come into effect alongside the new legislative provision, to help everyone in the workplace understand how it will work in practice. The code will also explain what constitutes ‘improper behaviour’;
  • Cap on unfair dismissal compensatory awards: there will now be a cap of 12 months’ pay for unfair dismissal compensatory awards. The current statutory cap will also still apply if 12 months’ pay is greater;
  • Revised Employment Tribunal procedural rules: under the new rules, tribunals will have new ‘strike out’ powers to ensure that weak cases that should not proceed to full hearing are halted at the earliest possible opportunity; guidance from the Employment Tribunal Presidents will be given to ensure that judges deal with hearings in a consistent manner, so that parties know what to expect. It will be made easier to withdraw and dismiss claims by cutting the amount of paperwork required, and a new procedure for preliminary hearings will combine pre-hearing reviews and case-management discussions;
  • New tribunal fees: level 1 claims (i.e. straightforward ones such as unlawful deductions) will have a £160 issue fee and a £230 hearing fee; level 2 claims (pretty much everything else) will have a £250 issue fee and a £950 hearing fee; the Employment Appeal Tribunal will have a £400 appeal fee and a £1,200 hearing fee. There are several other fees, e.g. £60 for an application to dismiss following settlement and £600 for judicial mediation;
  • Changes to whistleblowing laws: Part IVA of the Employment Rights Act 1996 will be amended so that disclosures are only protected if they can reasonably be said to be ‘in the public interest’.

Employment law changes due autumn 2013
Coming into force in autumn 2013 are the TUPE reforms, which will see the removal of service provision changes from the definition of a ‘transfer’.  The consultation period for collective redundancies of 100 or more employees will be reduced from 90 to 45 days. ‘Employee shareholder’ status, which was to exempt any capital gains made by individuals on the disposal of shares acquired through adoption of ‘employee shareholder’ employment status was due to come into force.  However, this has now been delayed after the proposals were rejected by the House of Lords. Whether ‘employee shareholder’ status will proceed at all now remains to be seen.

Employment law changes due next year
At some point in 2014, look out for mandatory early Acas conciliation and Employment Tribunal penalties for employers of 50% of any financial award (subject to a minimum of £100 and maximum of £5,000) where there are ‘aggravating features’, with a 50% discount for payment within 21 days.

Employment tribunals are changing significantly throughout 2013, so keep reading these bulletins for further updates as changes occur.

For more information on this or any other employment issue please contact Jennifer Clark-Lewis by emailing jclark-lewis@lyonsdavidson.co.uk.

Posted on Apr 10th, 2013 by Lyons Davidson