1. Early conciliation: details and implementation date confirmed
Commencement orders have confirmed that the mandatory period for Acas early conciliation of potential tribunal claims will apply to claims lodged from 6 May 2014, with transitional provisions covering the period from 6 April to 5 May. Claimants can choose to contact Acas for early conciliation from 6 April and, if they do so, must obtain an Acas early conciliation certificate that the process has finished before lodging their claim (in the same way as for post 5 May claims).
The early conciliation regime requires a prospective claimant to submit a form to, or telephone, Acas giving their name and address and that of at least one prospective respondent. The parties will then be offered pre-claim conciliation for one month, with a potential two week extension. This 'stops the clock' on the time limits for submitting the ET1 for the period of conciliation, and the claimant is also given a minimum of one month post conciliation to lodge the claim. The prospective claimant does not have to provide any details about the nature of the dispute. There is no obligation on either party to engage in the conciliation process; in that event, Acas will issue the certificate and the process ends.
The scheme applies to most claims, subject to a few exemptions. These include where the respondent has already contacted Acas in connection with the matter. In this case, prospective claimants can nevertheless contact Acas themselves in order to benefit from the time limit extensions.
For employers, the new regime will mean more contact from Acas and potentially longer periods between the dispute and a tribunal claim being lodged, given the extension to time limits. It is also hoped that the process will lead to more pre-claim settlement.
2. Tribunals: new compensation limits from April 2014
From 6 April 2014, the cap on the unfair dismissal compensatory award will increase from £74,200 to £76,574 and the cap on weekly pay (used to calculate the unfair dismissal basic award and statutory redundancy pay) will increase from £450 to £464.
This gives a maximum unfair dismissal award of £90,494. Note that since 29 July 2013 there has been an additional cap on the compensatory award of 12 months' pay.
The increases are set out in the Employment Rights (Increase of Limits) Order 2014 SI 2014/382.
3. Implementation dates: flexible work and shared parental leave, employer penalties, rehabilitation periods, abolition of statutory sick pay recoupment
- According to a BIS Press Office tweet, the proposed extension to the right to request flexible working to all employees with six months' employment will be implemented by 30 June 2014, and shared parental leave will apply from April 2015. Draft regulations implementing the new shared parental leave right have been published for consultation, available here.
- It has been confirmed that the discretion for tribunals to order a losing employer to pay a fine to the Exchequer for an "aggravated" breach of employment law is to come into force on 6 April 2014. The potential fine for losing employers is 50% of the value of the award to the employee, subject to being within the band of £100 to £5,000, and reduced by half if paid within 21 days. See here for further details.
- HR and managers involved in recruitment should note that, from 10 March 2014, the rehabilitation periods in the Rehabilitation of Offenders Act 1974 will be reduced, shortening the time period during which offenders must declare a previous conviction to prospective employers. The new periods are set out in the guidance here.
- Legislation is currently progressing through parliament to abolish the Percentage Threshold Scheme, which enables employers to reclaim Statutory Sick Pay from HMRC where the total SSP paid in a month exceeds 13% of their Class 1 National Insurance Contributions for that month. It is expected to take effect on 6 April 2014. This is intended to help fund the introduction of a new Health and Work Service which will offer voluntary medical assessments and treatment plans for employees (although this is unlikely to be fully operational until 2015). Employers may wish to bear in mind the impact of this change when reviewing policies to provide more generous sick pay than the statutory rate.
4. Tribunal fees: judicial review application; recoupment of fees from losing employer
Unison's challenge to the introduction of tribunal fees has been dismissed by the High Court, in large part because it was brought too early before sufficient evidence was available. An appeal has been lodged. The court also made clear that the Lord Chancellor will be under a duty to amend the fees regime if future statistics show that the EU requirement for effective remedies is being infringed.
The court did note that, given one of the policy objectives of the fee scheme is to encourage careful decision-making before cases are brought or continued, tribunals should issue case management orders to ensure that witness statements and documents are exchanged before the hearing fee is due.
The Lord Chancellor also conceded during the course of proceedings that a successful claimant should expect to recover the fees they have paid from the respondent. This has been reinforced by an EAT ruling in Portnykh v Nomura International plc. The EAT made it clear that, even where the respondent has acted properly in seeking to defend a claim, a successful claimant is likely to be able to recover their fees from the respondent. It ordered the respondent to pay the fees, conditional on the employee's outstanding fee remission application not succeeding.
Tribunal guidance now states that the general position is that, if a claimant is successful, the respondent will be ordered to reimburse them. The tribunal rules may be amended to reflect this in due course.
5. Discrimination: Equality Act does prohibit post-employment victimisation
Following two conflicting EAT decisions last year (see here), the Court of Appeal has now ruled that the Equality Act should be read as prohibiting post-employment victimisation, notwithstanding a drafting error. Such victimisation often consists of an employer giving an unfairly negative reference or refusing to give a reference (when it is normal practice to do so) for an ex-employee because they made a discrimination claim. (Jessemey v Rowstock, CA
6. Disability: time limit for reasonable adjustment claim may be affected by employer's commitment to review decision
An EAT has ruled that, as the duty to make a reasonable adjustment for a disabled employee is a continuing duty, a failure to comply with that duty was a continuing act, at least where the employer committed to a review. As such, the time limit for bringing a claim did not run from the employer's decision not to make the adjustment.
This conflicts with an earlier Court of Appeal ruling (Matuszowicz) that the time limit starts to run on the expiry of the period within which the employer might reasonably have been expected to make the relevant adjustment. However, the EAT's decision was also based on the fact that the employer had expressly stated that it was constantly monitoring the situation and that the decision might be reviewed, which made clear that there was no "once and for all" refusal. Employers may wish to bear the effect of making such a commitment in mind, at least while Matuszowicz remains good law. (Secretary of State for Work and Pensions (Jobcentre Plus) v Jamil, EAT)
7. Contracts: need for clear drafting on summary dismissal and flexi-hours
Two recent cases have highlighted the importance of clear drafting in employment contracts. In Robert Bates Wrekin Landscapes v Knightthe contract contained a provision allowing for summary dismissal for breach of a customer's security rules. The EAT ruled that this clause should be construed as only applying where the breach of security rules was deliberate. Summary dismissal for minor or inadvertent breaches would only be lawful if the provision had expressly referred to this type of breach.
Where employees work flexi-hours, the contract should ideally place a limit on how many additional hours can be accumulated, and specify whether, on termination, the employer will pay for any extra hours worked and not taken off in lieu. The EAT held in Vision Events (UK) v Paterson that no term could be implied requiring payment on termination in the absence of an express term, but it is possible that another tribunal would have implied such a term on the 'officious bystander' basis (ie, the term is so obvious it goes without saying: both parties would have agreed this was their intention had the issue been raised). It is advisable to ensure that flexi-hours schemes are drafted to deal with this issue, to avoid such disputes.
8. Disciplinaries: use of external consultants
Employers faced with disciplining a senior employee, or those with small workforces, may wish to use an external adviser for part of the disciplinary process. A recent EAT ruling highlights the importance of ensuring that there is clarity over the scope of the third party's role and whether that party is to make the final decision or simply provide a recommendation to the employer.
In Kisoka v Ratnpinyotip (t/a Rydevale Day Nursery) the EAT ruled that it was not unfair for an employer to overrule the decision of an independent appeal panel, where the employer's investigation and the decision to dismiss had been reasonable in the circumstances, and there were no terms of engagement between the employer and the panel binding the employer to implement the panel's decision. It was also relevant that it was a small employer, with no obligation to outsource the appeal in the first place.
In GM Packaging v Haslem the EAT accepted that it was reasonable for a small employer to delegate a disciplinary investigation to external HR consultants. Where their recommendations to dismiss were accepted, the reason for dismissal was held to be the set of facts/beliefs in the mind of the consultants.
9. TUPE: Court of Appeal upholds ruling that harmonisation dismissals unfair
The Court of Appeal has upheld the EAT's ruling that dismissing employees who refused to accept harmonised employment terms following a TUPE transfer (and re-engaging them on the new terms) was not for a fair "ETO" reason despite taking place against a backdrop of possible redundancies. The fact that other employees were being made redundant could not support an argument that the dismissal of the claimants was for an ETO reason – it is the reason applicable to the particular individual that matters. It is possible that another tribunal might have made a different finding of fact as to the reason for dismissal, had the claimants themselves still been at risk of redundancy at the time and had the changes to terms been presented as an alternative to redundancy. The case highlights the fact-sensitive nature of these situations.
Note also that, following recent reforms to TUPE, dismissals are now automatically unfair only if the sole or principal reason is the transfer (subject to the ETO exception), rather than a "transfer-connected" reason; it is unclear how much difference this change will make in practice.
The court also confirmed that a tribunal can order re-engagement, in effect reinstating the old terms and red-circling their pay levels. (Hazel v The Manchester College, CA)
10. Same-sex marriage: implications for employers with occupational pension schemes
Employers with occupational pension schemes may need to consider amendments to scheme rules in light of the Marriage (Same-Sex Couples) Act 2013, key provisions of which are due to come into force on 13 March 2014. The Act will allow same-sex couples the right to a civil marriage in England and Wales from 29 March 2014.
A statutory exemption effectively permits an employer's defined benefit pension scheme to exclude a member's civil partner from receiving death benefits to the extent they would be attributable to the period of the member's pensionable service before 5 December 2005 (apart from any accrued contracted-out benefits, which must be provided in respect of the member's contracted-out service from 6 April 1988). (The EAT has recently held this exemption to be lawful – see our HSFpensions ebulletin for details.) The same exemption will be available in relation to same-sex spouses.
Some schemes have provided civil partners with a more generous pension than the statutory minimum, equivalent to that of a legal spouse. In this event, employers may wish to make the same provision for same-sex spouses (to avoid anomalies arising where a civil partner converts their partnership into a marriage), although obviously there are costs implications. Employers would need to give their consent to amend the rules to this effect.
Further details are available in our HSF briefing here.