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What to expect in 2012 and beyond

What to expect in 2012 and beyond

As you all know, following on from our articles last year (New law and Planned law reforms), there are some major changes afoot in the heady world of employment law.  Whilst the detail of these changes remain what one might call, ‘sketchy’, we thought it might be useful if we took a bird’s eye view of what the new legal landscape may look like.

Unfair dismissal qualifying period (6 April 2012)
It is expected that, from 6 April 2012, the qualifying period for unfair dismissal claims will increase from one to two years.  Will this apply to existing employees, i.e., those with less than two years’ service at 6 April 2012 or only new starters after that date?  Who knows?!  However, the last time that the qualifying period changed it only applied to those commencing employment after the date that the change came into force and our guess would be that it will be the same again this time round.  So, if you are thinking about a recruitment drive you may wish to hold off until April to take advantage of the change.

Key Employment Tribunal Changes (starting from April 2012)
Deposit Orders
Although a seldom used power, if a Tribunal believes that a claim has little chance of success they can order the individual to make a payment into court of up to £500 which may be lost if the claim fails. It has been suggested that this figure will increase to £1,000 to act as a greater deterrent to bringing weak claims.

Costs awards
Another change expected in April 2012 is that the maximum amount of legal costs a Tribunal can award to the successful party will increase from £10,000 to £20,000. Again, this is to discourage weak claims. Whether this will actually achieve this is questionable as Tribunals are notoriously reluctant to award costs.

Tribunal fees
It is proposed that from 2013/2014 employees will have to pay to bring a claim. Two different fee charging structures have been proposed:

1. an issue fee and a hearing fee, the amount of which would depend on the nature of the claim.  For example, in an individual unfair dismissal claim, the claimant would have to pay an issue fee of £200 and a hearing fee of £1,000; or

2. an issue fee only, the amount of which will depend on what the claimant states their claim to be worth.  For example an individual unfair dismissal claim worth less than £30,000 would cost £500 to issue and one worth more would cost £1,750.

The hope is that individuals will have to think more carefully before embarking on litigation. The downside is that if the individuals do decide to issue a claim, it may be harder to persuade them to withdraw with no payment as they will not wish to be left out of pocket by having to cover any Tribunal fees themselves.

Pension auto-enrolment (October 2012)
New laws coming into effect in October 2012 will require UK employers to automatically enrol eligible jobholders into a pension scheme and pay compulsory minimum contributions. The government is staging implementation over four years from 1 October 2012, with employers separated into bands according to their payroll size. Larger employers will be starting first and the initial wave of employers will be able to voluntarily start auto-enrolment as early as July 2012.

Other possible key changes
TUPE 2006
The BIS is currently seeking views on the effectiveness of TUPE 2006 given concerns that the regulations are overly bureaucratic. Particular focus is being given to service provision changes, insolvency proceedings and collective redundancy consultation.

Holiday
An amendment may shortly be made to the Working Time Regulations 1998 to clarify when leave which cannot be taken due to absence on maternity, adoption, parental and/or paternity leave can be carried over to the next leave year.

Disputes and Litigation
Matters currently under review include:

– Financial penalties of up to £5,000 for employers that lose at Tribunal.

– Extension of the Acas Pre-Claim Conciliation scheme. Claimants will potentially be required to submit details of their dispute to Acas before filing a claim. Acas will have a duty to conciliate rather than a power.  

– Compromise Agreements to be simplified and to be renamed “Settlement Agreements”. 

– Consultation on a Rapid Resolution Scheme which could potentially provide quicker and cheaper determination of low value straightforward claims.  

– It has been suggested that the whistleblowing rules should be amended so that disclosures about breaches of employment contracts are no longer covered. 

– The government intends to consult on the introduction of “protected conversations” which will potentially allow an employer and employee to have frank and open discussions before disputes escalate.

– The government will be seeking views on a proposal to introduce “compensated no-fault dismissal” for companies with 10 or fewer employees.

As always, we will update you as and when there are any further developments – we bet you can hardly wait!

Paul Whinder
David Israel
Adam Grant

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