With the end of 2012 fast approaching, I thought that it would be a good time to update our employment law reform timeline to include changes in employment law expected in 2013, together with a reminder of changes implemented so far this year.

Major changes in 2012 have included:

  • an increase in the unfair dismissal qualifying period from one to two years (6 April);
  • judges sitting alone in unfair dismissal cases;
  • an increase in the maximum Tribunal compensatory award to £72,300 on 1 February and then a later announcement of proposals to reduce this maximum award to between 1 and 3 times the UK full-time median salary (£26,000 to £78,000) or 12 months' salary or a combination of both, whichever is lower;
  • increases to the maximum amounts for costs (£20,000) and deposit orders(£1,000) (6 April);
  • national minimum wage rate increase for apprentices and workers aged 21 and over but, at the same time, a pay-freeze for young workers (1 October); and
  • the commencement of pension auto-enrolment for large organisations initially with over 120,000 (1 October) and then over 50,000 (1 November) persons in their PAYE schemes.

2012 has also been a year of Government proposals for change in employment law, including:

  • Changes to collective redundancy, which included a proposal to reduce the 90-day minimum consultation period to 30 days for collective redundancies;  and issuing a new, non-statutory, Code of Practice which will address a number of key issues affecting redundancy consultations. We are awaiting the Government response to the consultation.
  • The use of settlement agreements to replace compromise agreements as a means to end the employment relationship. A principal aspect of the reform is that any settlement agreement discussions will not be admissible as evidence in unfair dismissal claims. The aim here is to ensure that both employers and employees can propose and negotiate exit packages on a without prejudice basis. The proposals also include producing a new ACAS Statutory Code of Practice on settlement agreements, detailing a model settlement agreement, model letters for use when proposing a settlement agreement, and a “guideline tariff” designed to help parties agree the amount of any settlement payment. The Government consultation on settlement agreements closed on 23 November 2012.
  • A new type of employee - namely the "owner-employee". In essence, the Government has proposed a new employment contract which would give employees the opportunity to own shares in their employer’s company in return for the individuals giving up many of their employment rights against their employer including the right to claim unfair dismissal. The Government consultation closed on 9 November and we understand that it intends to bring legislation into force to effect this change in April 2013.

To find out more detail on these changes, click the highlighted links.

In addition to these major proposals, we are expecting several other changes to employment law in the coming months and into 2013.

March 2013

  • In order to comply with member states’ implementation obligations under the Parental Leave Directive, the Government has now confirmed that it will increase unpaid parental leave entitlement from 13 to 18 weeks from March 2013. The Government has also indicated that, from 2015, it intends to increase the age limit on parental leave from the current 5 years to 18 years, providing each parent the right to up to 18 weeks' unpaid parental leave for each child under 18.

Summer 2013

  • The Government is aiming to implement the Employment Tribunal fees scheme in the summer of 2013, which will see claimants pay an initial fee for lodging a claim and an additional fee for taking the claim to a hearing.

Over the next 18 months or so, we can also expect to see further employment law reforms introduced by the Enterprise and Regulatory Reform Bill including:-

  • the introduction of penalties for employers who lose Tribunal claims; and
  • mandatory ACAS conciliation periods.

Beyond 2013?

A Government consultation response on "Modern Workplaces" has confirmed a further overhaul of family-friendly rights in the UK, including extending the right to request flexible working to all employees by 2014 and creating flexible parental leave to allow parents to share parental responsibilities in the first year of babies' lives. For more information, see my previous blog.


In our recent podcast myself and my colleague Lindsay Anderson discuss some of the Government's proposals for employment law reform including the introduction of Employment Tribunal fees, compulsory ACAS conciliation, financial penalties for employers who lose Tribunal claims and the reduction of the current compensatory award limit.

I will keep you updated on further developments.