April is often the time when the Government introduces significant changes to employment law. Whilst the past few years have seen some major changes, including the introduction of fees and ACAS Early Conciliation, this year, the changes are rather more modest.
On 1 April 2016, the Government is introducing its much flaunted National Living Wage. Employees aged 25 and over will be entitled to be paid a new hourly rate of £7.20 per hour, to rise to £9 per hour by 2020.
The National Minimum Wage will continue to apply to employees aged under 25 in three different bands: "standard rate" for employees aged 21 - 24, a "development rate" for employees aged 18 – 20 and then a "young workers" rate for employees aged under 18. A separate pay band will continue to apply to apprentices. The National Minimum Wage for each band will increase in October 2016.
From 6 April 2016:
- A new scheme will come into force, which imposes penalties on employers who do not pay Employment Tribunal awards or settlement payments agreed via ACAS conciliation and set out in a COT3 agreement. The result is that penalties can be imposed on employers, of up to 50% of the unpaid sum, subject to a minimum payment of £100 and a maximum payment of £5,000. The penalty is paid into the Consolidated Fund (the government's bank account at the Bank of England) rather than to the affected employee. The new scheme should help employees to secure payment of their awards. This new measure may not provide a complete solution to the problem of unpaid awards, since 25% of awards remain unpaid because the respondent is insolvent. However, the government is considering introducing additional measures to 'name and shame' employers who fail to pay-up.
- Each party in a Tribunal case will only be able to apply for postponement of a Tribunal hearing twice. Further, the cut-off for making postponement applications will now be 7 days before the Tribunal hearing. Despite this, the government clearly anticipates that parties will still make late applications as the new rules also provide that if a successful application is made within 7 days of a hearing, Tribunals will have to consider making a costs or preparation time order. These measures are aimed at ensuring that cases are not unduly delayed.
- Statutory Sick Pay remains at £88.45 per week, Statutory Maternity/Paternity/Shared Parental/Adoption Pay remains at £139.58.
- The maximum weekly pay for calculation of statutory redundancy, basic and unfair dismissal awards will increase from £475 per week to £479 per week. The result is that the maximum award for statutory redundancy will be £14,370 and the maximum award for compensation for unfair dismissal will be £78,962.