April brings about a number of important changes in the employment law field.
From 6 April 2014, the following important changes will take effect:
Rise in Statutory Rates and Compensation Limits
From 6 April 2014, a week’s pay (for the purposes of calculating statutory redundancy payments and the basic award of compensation increases to £464 (from £450). The maximum compensatory award for unfair dismissal increases to £76,574 (from £74,200) for those cases where this exceeds the equivalent of 12 months’ of a claimant’s pay.
At the same time, the rate of Statutory Sick Pay increases to £87.55 (from £86.70) and Statutory Maternity, Paternity and Adoption Pay to £138.18 (from £136.78).
Introduction of Early Conciliation
A process of Early Conciliation will be introduced, initially voluntarily, from 6 April, so that any requests for conciliation through Acas, on or after that date, will be treated as Early Conciliation.
From 6 May, it will be a requirement for most claimants to notify Acas before they will be permitted to present a claim to the Employment Tribunal. Acas will then endeavour to conciliate a settlement, although both parties remain at liberty to decline to participate in that process. All claims which fall within Early Conciliation will require an Early Conciliation Certificate from Acas before being processed by the Tribunal. The relevant time limits for bringing claims will be extended whilst conciliation discussions are pursued.
Although participation in Early Conciliation is voluntary, employers should give thought now to how they will respond to contact from Acas. One option might be to nominate a member of staff to whom Acas will refer all Early Conciliation calls, for example someone in HR, so that they might conduct a brief risk analysis and seek advice, where the circumstances are more complex or sensitive. It will also be important for employers to be aware of the Early Conciliation period so as to appreciate when tribunal time limits expire.
Abolition of Statutory Discrimination Questionnaires
Statutory discrimination questionnaires and the procedure and timeframes applicable to their use, are repealed.
It is important to bear in mind that this change will not prevent those who think they have been unlawfully discriminated against seeking information from those they believe have discriminated against them. Were an employer or service provider to ignore legitimate questions in future, or to provide answers that are evasive, a tribunal or court could still, in appropriate cases, take account of that fact in deciding if there has been discrimination. It will be important for employers to spot legitimate requests which could fall within this risk and may, in future, be contained in letters or more informal letters.
Acas has produced Guidance for employees and employers regarding the appropriate use of questions in the absence of the statutory procedure.
New Tribunal Penalties for Employers
Financial penalties are introduced for the first time for employers found by a Tribunal to have breached employment rights in an aggravated (eg malicious or reckless) way, where the claim is presented on or after 6 April 2014. In such circumstances, the Tribunal will have a discretion to order the employer to pay a financial penalty. Any penalty will be payable to the Secretary of State, on top of any compensation due to the employee. The starting point for determining the amount of any penalty the Tribunal decides to award is 50% of the compensation awarded, subject to a minimum penalty of £100 and maximum of £5,000, with a 50% reduction applying for early payment.
Where an individual claimant succeeds in several different claims which relate to the same act, these are treated as a single claim. This means the compensation awarded to the claimant for each of the claims is added together and treated as one award when determining any financial penalty and applying the £100 minimum and £5,000 maximum. Where, however, an individual brings multiple claims relating to different acts then each claim may be the subject of its own penalty, with the minimum and maximum amounts applying to each separate penalty.
Where a tribunal determines claims brought by several workers against the same employer together, each claim potentially gives rise to a separate penalty. In those circumstances the £100 minimum applies to the amount of the penalties in total but the £5,000 maximum applies to each of the penalties/claims individually.
Removal of Sick Pay Recovery
The Percentage Threshold Scheme which allows employers with relatively high levels of sickness absence to recover a percentage of statutory sick pay is ending.
Prior to 6 April, SSP was recoverable from HMRC where the cost to the employer exceeded 13% of its Class 1 National Insurance contributions in a given month. Removal of this recoupment scheme could accordingly be significant for small employers. However, they are likely to benefit most from a new helpline advice service, to accompany a new state-funded employee health scheme from end of 2014.
Increase to Immigration Fines
An employer who employs an individual lacking the right to work in the UK, is liable to a civil penalty, in addition to any criminal liability. The maximum civil penalty is increasing from £10,000 per individual employee to £20,000.
Other things to watch out for later this year…
- Extension of the right to request flexible working –beyond children with parents, to all employees
- Compulsory equal pay audits –as a new tribunal power
- A new sickness absence regime –an independent assessment process, based on the recommendations of the Dame Black and David Frost commission
- Prospective fathers or a mother’s partner will be able to take time off to attend up to 2 antenatal appointments