What to expect in 2012

What does 2012 have in store employment law wise?

Increase In Employment Tribunal Award Limits

As of 1 February 2012 the position will be as follows:-

maximum unfair dismissal compensatory award £72,300 (increased from £68,400)
maximum week's pay £430 (increased from £400 - this figure is used for calculating statutory redundancy payments and the basic award in an employment tribunal)
This now means that the maximum unfair dismissal award will be £85,200 (maximum basic award plus maximum compensatory award).

Bear in mind that there will still be no limit to the amount that can be awarded for unfair dismissal for certain health and safety and whistleblowing reasons. In addition, there is no limit to the amount that can be awarded for discrimination claims.

Pension Changes

October 2012 sees the implementation of auto enrolment for pensions. Although auto enrolment commences on 1 October 2012, duties upon employers will be staggered over four years, starting with large organisations. Once auto enrolment is implemented, all employers will require to automatically enrol eligible job holders into an appropriate pension scheme.

Family Friendly & Sick Pay Rates

From 9 April 2012, statutory sick pay will increase to £85.85 from £81.60 and statutory maternity, paternity, additional paternity and adoption pay will increase to £135.45 from £128.73.

Increase In National Minimum Wage

Not yet announced but, as per previous years, I would expect this to increase with effect from 1 October 2012.


Qualifying Period for Unfair Dismissal Claims

The qualifying period for raising a claim of unfair dismissal is set to increase from 1 to 2 years from April 2012. However, it is important to note that some claims for unfair dismissal do not require a year’s continuous service and certain claims will still be capable of being brought from day one of the employment relationship. Dismissals relating to discrimination, whistleblowing, exercising certain statutory rights, and health & safety-related reasons are not covered by the qualifying period and claims can be brought from the outset of the relationship. This will not change from April.


Employment Law Reform

The main changes proposed include increasing the qualifying period for unfair dismissal claims from one to two years, allowing, or certainly making it easier for, employers and employees to have frank discussions about any employment issues, and a revamp of the Employment Tribunals system.



Fees

Consultation has begun on proposals to introduce a fee structure in the Employment and Employment Appeal Tribunals.

Currently, Claimants are not required to pay to raise a claim or an appeal with the Employment Tribunals or the Employment Appeal Tribunals Office. The current consultation seeks views on two proposed fee charging schemes:

Firstly, that the level of fees charged will depend upon the nature of the claim and the stage proceedings reach. Two fees would be payable by the Claimant, one at the time the claim is lodged and the second for claims proceeding to hearing. For single claims, the initial fee would be between £150 and £250 and the hearing fee would be between £250 and £1250 depending on the type of claim. Once a claim has been accepted, six further fees would be charged for certain specified applications, for example a request for written reasons or a counterclaim.

The second proposal is that one main fee would be paid by the Claimant when the claim is raised, regardless of whether or not the claim progresses to a hearing. For a single claim, it is proposed that the fee would range between £200 and £1,750 depending on the amount being claimed. As above, six further fees for certain applications would be payable. It is proposed that for those Claimants seeking an award of over £30,000, the fee would be substantially higher than for Claimants who were seeking a significantly lesser sum.

For the Employment Appeals Tribunal the fee structure proposed is similar to option one, above, the proposed initial fee being £400 with a hearing fee of £1,200.

The consultation, which closes on 6 March 2012, seeks views on the proposal that the fees could be reimbursed by the unsuccessful party to the successful party should the Tribunal consider this to be appropriate.

Costs Awards and Deposits

Currently Employment Tribunals may award up to £10,000 in costs (or expenses in Scotland) against the unsuccessful party at a hearing, although this is rarely exercised in practice. It is proposed that, from April, the maximum amount of costs which could be awarded by the Tribunal will increase to £20,000.

If an Employment Judge considers that all or part of a claim (or a response) has little reasonable prospect of success, he or she may make an order requiring that party to pay a deposit of £500 or less as a condition of being permitted to continue to take part in the proceedings. As part of the reform, from April the amount of deposit a Tribunal can order a party to pay will increase to £1,000.

Witnesses

Currently, witnesses can apply to the Employment Tribunals Office to be reimbursed for the expenses incurred in attending a hearing. From April, this procedure will be withdrawn and the Tribunal will be able to direct parties to bear the cost of witness attendance, including the cost of witnesses called by the successful party.

Another change to come into force in April is in relation to witness statements. This will apply to Tribunals in England & Wales where it is standard practice to use witness statements at hearings. From April, witness statements will be taken as read at the Employment Tribunal unless directed otherwise by a Judge. The position in Scotland will remain unchanged as witnesses are usually required to give oral evidence without the use of witness statements.

Panel Members

Unfair dismissal hearings are heard by an Employment Judge and two lay members. From 1 April 2012 an Employment Judge will hear unfair dismissal cases alone. This change will be reviewed after a year in order to see how successful this is in practice.

ACAS Conciliation

It is also proposed that prior to submitting a Tribunal claim, a Claimant will require to submit details of their complaint to ACAS. Parties would then be offered pre-claim conciliation for a period of one month. In terms of time limits, if both parties agree to enter into pre-claim conciliation then effectively the 3 month time limit for submitting claims will be paused and the Claimant will have a month after the conclusion of pre-claim conciliation to present their claim to the Tribunal.

Flexible Working

It was hotly anticipated that an extension to the right to request flexible working would come into force in April 2011 for all parents with children under 18. However, this proposal was shelved but further proposals have now been outlined which introduce flexible parental leave and flexible working.

Flexible parental leave would allow unpaid leave for fathers to attend antenatal appointments and an 18 week period of maternity leave for mothers, followed by a new 34 week period of shared parental leave.

The right to request flexible working would be extended to all employees who have 26 weeks’ continuous employment, regardless of whether or not they have children. There would also be an introduction of a new requirement for employers to consider requests “reasonably”.

A time frame has not been suggested in relation to the flexible working changes, and these are key proposals only.

Protected Conversations

Consultation is underway on introducing a system of ‘protected conversations’ to allow employers to raise issues such as poor performance or retirement plans in an open way, free from the worry that it will be used as evidence in a subsequent tribunal claim.

Simplifying Compromise Agreements

Consultation on simplifying compromise arrangements, to enable two sides to reach a no-fault settlement in exchange for an agreement not to bring future claims. A standard text “settlement agreement” is proposed. In addition, the Government intends to rectify the issue relating to the wording of section 147 of the Equality Act which has caused some confusion as to whether discrimination claims can be compromised.