OUT WITH THE OLD (or perhaps not anymore)

  • Abolition of default retirement age: On 6 April 2011, the default retirement age and the statutory retirement procedures were abolished. As a result, employers are no longer able to lawfully dismiss an employee simply because they have reached the age of 65. They can opt to maintain their own compulsory retirement age which applies to either the workforce as a whole, to particular groups of the workforce or to particular individuals provided they are able to objectively justify it, in other words, provided they can show that maintaining a compulsory retirement age is a proportionate means of achieving a legitimate aim. How easy or difficult this will be remains to be seen. If, on the other hand, employers choose to work without a normal retirement age, the concept of retiring employees will disappear and dismissals will need to fall within one of the other potentially fair reasons for dismissal or an agreement will need to be reached with the employee.

For those employees who have or will reach the age of 65 by 30 September 2011 transitional provisions apply but to take advantage of these, employers will have to have commenced a statutory retirement procedure by issuing a notice of intention to retire on or before 5 April 2011.

IN WITH THE NEW

  • Rights to additional paternity leave: Additional paternity leave is now available for employees with babies born or children matched for adoption on or after 3 April 2011. The intention is to encourage parents to share caring responsibilities by providing for between two and twenty-six weeks’ additional paternity leave to new fathers, husbands, partners and civil partners provided the child’s mother or primary adopter has returned to work without exercising their full entitlement to maternity leave. Some of that additional paternity leave may also be paid if it is taken during the mother’s maternity pay period. For a summary of the key changes see our previous newsletter In Brief Volume 2, No.1 Spring.
  • Equality Act 2010: The implementation of the Equality Act 2010 continues with the introduction of the public sector equality duty and the positive action in recruitment and promotion provisions last month. Additionally, an Employment Statutory Code of Practice and Equal Pay Statutory Code of Practice providing guidance on how to comply with the Act have been brought into force and are available here.
  • Small business exemption: Businesses with fewer that ten employees and genuine start-up businesses are, from 1 April 2011, exempt from new domestic regulations for three years.
  • Permanent migration caps introduced: Last month also saw the introduction of permanent migration caps on skilled and highly skilled non-EEA migrants coming into the UK. The cap restricts the number of skilled professionals entering under Tier 2 (General) to 20,700 per year and visas under Tier 1, the highly skilled category, being restricted to just 1,000 per year for entrepreneurs, investors and people of exceptional talent. Full details of the cap are available from the UKBA website here.
  • Taxation of termination payments: From 6 April 2011, employers are obliged to deduct the appropriate rate of tax from any payments made to an employee on termination of employment regardless of whether the payment is made before or after the P45 is issued. Employees are therefore no longer able to enjoy the cashflow advantage of receiving such payments after the P45 has been issued with deduction of basic rate tax only.
  • Statutory rates: These increased last month in respect of maternity, paternity, adoption and sick leave and from February in respect of the statutory cap on a week’s pay. Set out below are all of the current rates and maximum awards.

Click here to view the table.

EXPECTED CHANGES NO LONGER COMING INTO FORCE

The Government recently announced that it will no longer be seeking to:

  • Extend the right to request time off for study and training to employees of small employers, the right therefore continues to apply to only employees of companies with 250 or more employees.
  • Implement the dual discrimination provisions of the Equality Act 2010, which would have allowed employees to bring claims of discrimination based on two combined characteristics.

AND A LOOK AT WHAT’S ON THE HORIZON

  • The Employment Law Reform announced earlier this year by the Government which includes plans to increase the qualifying period for unfair dismissal claims from one to two years‘ continuous service, introducing a fee for lodging tribunal claims and making mediation compulsory for all tribunal cases has been the subject of consultation. That consultation closed on 20 April 2011 and we await the outcome.
  • A Consultation on Modern Workplaces was launched on 16 May 2011 by the Department for Business Innovation and Skills (full details available here).
  • The consultation is open until 8 August 2011 and proposes to:
    • introduce new flexible parental leave rights. Being suggested is a plan to limit maternity leave to 18 weeks and to reclassify the remaining time as parental leave to be taken by either the mother or the father or both;
    • extend the right to request to work flexibly to all employees and not just those with children under 17 (or under 18, where the child is disabled). The Government only recently announced that it would no longer be seeking to implement plans to extend this right to those with children under 18 and so this proposal marks a substantial change of direction;
    • amend the Working Time Regulations 1998 to allow employees to carry over untaken holiday where they were unable to take it due to sickness absence or maternity/parental leave; and
    • introduce a duty for employment tribunals to require employers to conduct a pay audit if they have been found to be in breach of equal pay legislation.
  • The Bribery Act 2010 is now expected to come into force on 1 July 2011. In the meantime, the Ministry of Justice has published guidance about procedures that organizations can put in place to avoid liability for bribes made by associated people and a non-statutory quick start guide aimed at small businesses. For further information regarding the key provisions of the Act, please see our previous Client Alert 31 March 2011.
  • The Agency Worker Regulations 2010 are expected to come into force on 1 October 2011. Final guidance has now been published and is available here.