In this alert we outline the main changes in UK employment law this October. The most notable piece of legislation coming into force this October is the Agency Workers Regulations 2010, but there are quite a few possible changes afoot. These include forthcoming consultations on increasing the qualifying period for employees to bring unfair dismissal claims from one year to two years, as well as introducing fees for lodging employment tribunal claims.

Agency Workers Regulations

On 1 October 2011, the Agency Workers Regulations 2010 will come into effect. These controversial new regulations (the Regulations) will have a dramatic impact on the relationship between agency workers, agencies and hirers. They will provide increased protection to agency workers, giving them from day one equal access to facilities and amenities at work and the right to receive information about new positions within the hirer. Most importantly, after working for a qualifying period of twelve weeks, agency workers also have the same right to basic working and employment conditions as those enjoyed by workers recruited directly by the hirer. Both the hirer and the recruitment agency may be liable for breach, depending on the type of claim.

What you should be doing:

  • make an assessment of the skills required for roles carried out by your agency workers and your employees to assess whether the agency workers have an appropriate comparator for the purposes of the Regulations;
  • carry out an audit of your agency workers, paying particular attention to their basic terms of employment, and comparing them to the terms of “comparable” employees;
  • provide to agencies appropriate information of comparable workers (including standard terms of employment, pay scales and holiday entitlements);
  • put in place HR systems to accurately calculate the qualifying period for each agency worker;
  • consider mechanisms to mitigate the impact of the Regulations and take advice as necessary.

For more information concerning the basic rights of hirers and agency workers, please see our client alert.

National Minimum Wage (NMW)

The latest increases in the hourly rates of the NMW which will take place on 1st October 2011 are:

  • standard adult rate - £6.08 (increased from £5.93),
  • development rate for 18 to 20 year olds – £4.98 (increased from £4.92),
  • young workers rate, for any worker who has not attained the age of 18 but has ceased to be of compulsory school age and is not an apprentice - £3.68 (increased from £3.64),apprentices, who are either under 19, or 19 and over but in the first year of their apprenticeship - £2.60 (increased from £2.50),
  • accommodation offset - £4.73 (increased from £4.61).

These changes are set out in the draft National Minimum Wage (Amendment) Regulations 2011. From 1 October, institutions providing accommodation to workers undertaking a higher education course or full time further education course will be entitled to charge the worker the full cost of accommodation provided (or count it as a benefit in kind) without being limited by the ceiling provided by the accommodation offset rule. See the draft National Minimum Wage (Amendment No.2) Regulations 2011 (published in July 2011).

Default Retirement Age

As from 1 October 2011, there will no longer be a national default retirement age (DRA) of 65 except with regard to certain employees who have already been served with retirement notices on or before 5 April 2011. On 6 April 2011, the transitional provisions under the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 came into force. These Regulations implement the Government’s plan to abolish the DRA as from 1 October 2011 and any associated retirement procedure, including the right to request working beyond retirement. For further information see our client alert Phasing out the UK Default Retirement Age.

What you should be doing:

  • review current retirement notices which have already been served and check their validity:
  • the employee must have reached the age of 65 by 30 September 2011;
  • the proposed retirement date must not fall after 5 April 2012;
  • check that the correct information has been supplied to the employee (see our client alert);
  • consider whether employment contracts need to be amended;
  • consider the effect on your business of having a workforce with older members – will you need to put any measures in place to accommodate this? (see our previous client alert);
  • consider if there is any scope for having an “employer justified” retirement age for any particular group of employees in your workforce, this needs to be considered very carefully;
  • review arrangements for the provision of group risk insured benefits for workers over 65 and check if the exemption set out in the 2011 Regulations applies;
  • review the Acas Guidance Working without the default retirement age.

Also expected this Autumn or early 2012:

  • The Government’s response to the Consultation on Modern Workplaces which proposed an extension of the right to request flexible working to all employees within 26 weeks’ continuous employment and a new requirement for employers to consider requests “reasonably”. The Government’s recently published One-in, One-out: Second Statement on New Regulation, indicates that the Government will shortly be consulting on increasing the qualifying period for employees to ring an unfair dismissal claim from one year to two years, as well as introducing fees for lodging employment tribunal claims.
  • The Department for Work and Pensions has indicated that the review of the current sickness absence regime by Dame Carol Black will be published in Autumn this year. The review looks into ways in which the current sickness absence regime could be changed. Any proposals are expected to be consistent with promoting private sector growth and minimising “burdens on business”. In 2008, Dame Black’s report Working for a healthier tomorrow led to the introduction of the “fit note”.
  • An announcement regarding the Government’s general Employment Law review on the “Red-tape Challenge” website. The Government’s plans for deregulation were announced in the Plan for Growth published alongside the budget of 23 March 2011, and included a thematic review of 21,000 statutory instruments, including 151 instruments relating to Employment Law. Having already examined other areas such as Equalities, Health and Safety and Environment, Employment Law is apparently next on the agenda for review.
  • An announcement from the Government on its extended Employment Law review (announced on 11 May 2011) in three particular areas: discrimination compensation, collective redundancy consultation and transfer of undertakings (TUPE 2006).
  • A Government consultation about revoking the third party harassment provision in the Equality Act 2010.
  • The Government’s response to Lord Davies’ review of boardroom gender and equality, Women on boards.