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A number of important employment legislation changes are being introduced at the start of the 2016/17 financial year. Below, we outline the most important ones.

National Living Wage

For many employers this change will require the most careful planning to accommodate. From 1 April 2016, the National Minimum Wage (Amendment) Regulations 2016 will come into force and introduce a new National Living Wage of £7.20 an hour for workers over the age of 25.

Annual compensation limit increase

The Department for Business, Innovation and Skills have increased the annual compensation limits in the Employment Rights (Increase of Limits) Order 2016 from 6 April 2016. A week’s pay, which is used to calculate dismissal, statutory redundancy pay and detriment awards, is increasing from £475 to £479. The maximum compensatory award will increase from £78,335 to £78,962.

Tribunal postponement powers from the Small Business, Enterprise and Employment Act 2015

Section 151 of the SEEBA 2015 amended the Employment Tribunals Act 1996 to give the Secretary of State the power to introduce regulations limiting the number of postponements or adjournments available to a party. From 6 April, the Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2016 will restrict the number of postponements for each party in each case to two, introduce a deadline for postponements of seven days before the hearing and require a costs or preparation order to be considered where a successful application for a postponement is made less than seven days before the hearing.

Unpaid tribunal awards and settlements

A new scheme for financial penalties for employers who do not pay tribunal awards or settlement sums under a COT3 will be introduced. The Small Business, Enterprise and Employment Act 2015 (Commencement No 4) Regulations 2016 will bring into force section 150 of the SEEBA 2015 on 6 April, inserting a new Part 2A into the Employment Tribunal Act 1996.

Removal of contracting-out on a salary related basis

The government will remove its National Insurance contribution rebates for contracting out state second pension, so that employers and employees will now have to contribute in full.

For more information on the employment legislation changes raised in this article or on employment law in general, please contact our Employment team.