Ready, Set, Go! Game Plan 2012

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Date: 27/01/12

2012 is set to be another busy year in employment law. Read our snapshot guide to the likely changes to help you plan for the year ahead.

Anticipated and confirmed developments to occur later in 2012 include:

Confirmed:

From early April 2012, the following increases (announced by the Department for Work and Pensions) shall apply:

  • The standard rates for statutory maternity pay, statutory paternity pay and statutory adoption pay will increase from £128.73 per week to £135.45 per week. The weekly earnings threshold for these payments will rise from £102 per week to £107 per week.
  • Statutory sick pay will increase from £81.60 per week to £85.85 per week, with the weekly earnings threshold also rising from £102 per week to £107 per week.
  • The standard rate for maternity allowance will increase from £124.88 to £135.45, with the earnings threshold remaining at £30.

Anticipated:

  • From April 2012 changes to the Maternity and Parental Leave etc Regulations 1999 may be introduced to increase an employee’s entitlement to unpaid parental leave for the purpose of caring for a child from 3 months to 4 months.
  • From April 2012 the Working Time Regulations 1998 (“WTR”) may be amended to bring UK law in line with recent European rulings to allow workers who are unable to take annual leave during one holiday year to carry the unused leave over to the next holiday year.
  • Similarly, it is also anticipated that the WTR may be amended to allow leave which is untaken due to absence on maternity, adoption, parental and paternity leave to be carried over into the next leave year.
  • In October 2012, the national minimum wage rate will be subject to its annual review. The review will be based on the recommendations of the Low Pay Commission, whose report is due by the end of February 2012, and, in keeping with previous annual reviews, an increase is likely. .

Almost certainties - the changes that are almost guaranteed to be made in 2012 include:

Unfair dismissal – the qualifying period to bring a claim of unfair dismissal is set to go up from one year to two years’ continuous employment.  This is set to change in April 2012.  The new two year qualifying period will only apply to employees whose employment begins on or after 6 April 2012. Those who are already in employment before that date will retain the current one-year qualifying period. 

Deposit orders – the amount the Tribunal will be able to order a party to pay by way of deposit order is set to increase from £500 to £1,000.

Deposit orders are issued where, at a preliminary hearing, an Employment Judge considers that a party has little prospect of success, and orders them to pay a deposit to the Tribunal in order to be allowed to continue.  This deposit could then be lost if that party is subsequently unsuccessful at the later hearing and costs are awarded to successful party.

Cost awards – the Tribunal will have the power to award a maximum of £20,000 costs, which is a dramatic increase from the current maximum of £10,000.  Costs are most commonly ordered against an unsuccessful party if that party acted unreasonably in the conduct of the proceedings, or in a Claimant’s case if their claim was misconceived, vexatious, or had no prospects of success.

Witness statements – these are to be taken as read as standard, as opposed to asking witnesses to read out their statements at the start of their evidence, unless in circumstances where the Employment Judge directs otherwise.  This will save time during Tribunal hearings. 

Expenses of witnesses – Tribunals will have the power to order parties to cover their own witnesses’ costs, and the costs of witnesses called by the successful party.  The previous option of witnesses’ expenses being covered by the Tribunal Service is set to be withdrawn, turning the expense back on to the parties.     

Judges sitting alone on unfair dismissal cases – lay members will not be required for unfair dismissal hearings; Employment Judges will hear these cases on their own.  This is to speed up the hearing of more straightforward claims.  However, this change is to be reviewed again after a year.

All of these changes should be good news for employers.  The idea behind the changes is to cut back the costs to the Tribunal Service by reducing the number of claims made, by making it harder to lodge a claim, setting harsher penalties for vexatious claims or unreasonable conduct, and shortening the length of the hearings of those claims that reach a full hearing. 

Maybes - Potential employment developments with no confirmed date

These are key changes likely to be implemented in 2012 and thereafter but with no confirmed date.

Penalties for employers in breach of employment rights

It is intended that financial penalties will be introduced for employers who lose at Tribunal. This change could be introduced as soon as April 2012 and may result in employers, who lose at Tribunal, paying penalties of up to 50% of the compensation the employer has been ordered to pay to the employee. This will however, be limited to a minimum of £100 and a maximum of £5,000. Any penalty imposed on the employer will be payable to the government.

Early ACAS conciliation of Tribunal claims

Plans have been announced for Acas to provide an early conciliation service which would require claims to be initially lodged with Acas before a claim is presented to the Tribunal. This is in an effort for parties to conciliate and settle a matter prior to any legal proceedings. The new process would halt the time limit for a Claimant to present a claim to the Tribunal. The Acas website advises that the new service is not expected to be introduced until April 2014.

Compromise agreements to be simplified

A consultation is expected to be launched to consider the use of compromise agreements.  At present many consider that compromise agreements are over complicated and needlessly lengthy. A proposal to simplify compromise agreements will result in such agreements being titled ‘settlement agreements’. It is also intended that the new ‘settlement agreements’ would be used to compromise discrimination claims, which is currently a grey area. The hope is that the change will encourage mediation and reduce the cost and time usually involved in preparing traditional compromise agreements.

Consultation on 'protected conversations' between employers and staff

The government is set to launch a consultation into a proposal for employers and their staff to have a ‘protected conversation’ about any employment issues without the risk of a legal claim being raised in the future. This is aimed at allowing employers and staff to have a frank discussion about difficult issues, such as retirement or performance, in a ‘without prejudice’ environment and be assured that anything considered will not be used as a reason for a subsequent claim. The proposal is not of course intended to protect employers from conducting discriminatory conversations. 

Rapid resolution schemes as an alternative to Tribunal claims

A consultation is anticipated regarding the introduction of a rapid resolution scheme as an alternative to Tribunal claims. This will be in an attempt to provide quicker and cheaper decisions for low-value and straightforward disputes, such as holiday pay disputes. It has been suggested that these simple claims should be heard non-judicially or be dealt with on paper. The aim will be to provide a swift resolution within 3 months, potentially avoiding the need to attend a hearing and instead allowing employers to focus on their business.

Acas Disciplinary and Grievance Code to be 'looked at'

The current Acas Disciplinary and Grievance Code is to be 'looked at' with a view to 'radically slimming down existing dismissal processes'. The government will be seeking views on the introduction of 'simpler, quicker and clearer dismissal processes'.

Amendment of whistle blowing rules

The government have stated an intention to address a 'loophole' in legislation that enables employees to blow the whistle about breaches to their own employment contracts. An amendment to the law is expected so that these disclosures will no longer be covered. No further plans to address the issue have been unveiled.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

 
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