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Upcoming changes to Employment Law

25th March, 2013

April 2013: rate of statutory sick pay, maternity, paternity and adoption pay to increase

The standard rate of statutory sick pay will increase from £85.85 to £86.70 per week on 6 April 2013. The standard rate of statutory maternity, paternity and adoption pay will increase from £135.45 to £136.78 per week from 7 April 2013

6 April 2013: Minimum consultation period to be reduced

The 90-day minimum consultation period where 100 or more redundancies are proposed reduces to 45 days from 6 April 2013. In addition, employees whose fixed term contracts are due to expire will be excluded from the consultation process

Spring 2013: Enterprise, Regulatory and Reform Bill expected to receive Royal Assent

The Enterprise and Regulatory Reform Bill (“ERRB”) was published and introduced into Parliament on 23 May 2012 and the report stage in the House of Lords will continue from this Friday, 18 March 2013. The following changes are planned to employment law:

  • Power given to the Secretary of State to increase or decrease the unfair dismissal compensatory award and a 12 months’ cap on unfair dismissal compensatory awards is to be introduced, which will run alongside the overall cap.
  • Right for an Employment Tribunal to make a deposit order in respect of a specific part of a claim or response only, also to make a preparation time order and order witness expenses for a litigant in person.
  • Right for an Employment Tribunal to order pay audits where an employer is found guilty of gender discrimination in relation to contractual or non-contractual pay matters.
  • Clarification that a disclosure, in order to bring an automatic unfair dismissal claim for whistleblowing, is not protected unless in the reasonable belief of the worker it is made “in the public interest,” the removal of “good faith” from the definition of a protected disclosure, and a new power for tribunals to reduce compensation by up to 25% if a protected disclosure has not been made in good faith. The Government has also announced that the ERRB will introduce the concept of vicarious liability to the whistleblowing provisions of the Employment Rights Act 1996.
  • Renaming of compromise agreements to “settlement agreements.”
  • The requirement for claimants to contact the Advisory, Conciliation and Arbitration Service before issuing a claim in an Employment Tribunal (the concept of compulsory pre-claim conciliation (expected to come into force in 2014).
  • Right for an Employment Tribunal to issue a financial penalty between £100 and £5,000 against an employer who has breached any of its worker’s rights and involves a breach of one or more aggravating features (expected to come into force in 2014).

Summer 2013: Fees for bringing claims in the Employment Tribunal and proposed changes to the Tribunal procedure to be introduced

The new fee system for single claims will be split into two groups; level one claims and level two claims:

  • Level one claims will be those relating to payments which become due on termination of employment; such as claims for payment in lieu of notice, redundancy payments and unpaid wages. The issue fee for level one claims will be £160 and the hearing fee will be £230.
  • Level two claims will be those relating to unfair dismissal, discrimination, equal pay claims and claims which arise under the Public Interest Disclosure Act 1998. The issue fee for level two claims will be £250 and the hearing fee will be £950.
  • The fee for bringing an appeal to the Employment Appeal Tribunal will be £400 and the hearing fee will be £1,200.
  • There will also be a separate fee structure for those wanting to bring multiple claims in the Employment Tribunal.

However, it is planned that those on lower incomes will not have to pay the full fees; similar to the system which already exists for those who use the civil courts’ service under HM Courts & Tribunals Service fee remissions scheme. The Government also announced they will review the current fee system and will undertake a public consultation in that regard.

The Government has also announced that it has accepted some of Mr Justice Underhill’s proposals in relation to proposed improvements to the tribunal procedure, which are expected to come into force this summer. These are as follows:

  • New strike out powers to ensure that cases with low prospects or little merit do not make it to the full hearing and are struck out at the earliest opportunity;
  • Guidance to be provided from the Employment Tribunal Presidents to ensure judges deal with hearings consistently;
  • Reducing the amount of paper work that is needed in order to make it easier for claims to be withdrawn and dismissed; and
  • Combining Pre-Hearing Reviews and Case Management Discussions

Autumn 2013: “Employee shareholder” contracts to be introduced

Employee shareholder contracts may be introduced as a result of the Growth and Infrastructure Bill 2012-2013. Employees would be able to buy tax-free shares in the business they work for, at a minimum cost of £2,000. This is in exchange for a number of their employment rights: the right to claim unfair dismissal, statutory redundancy payment, the right to request flexible working and the right to time off for study or training. The employee would also need to inform their employer of their intended return to work after maternity, adoption or additional paternity leave 16 weeks in advance rather than the usual 8 weeks.

Please note that the House of Lords have voted to strike down the clause which would introduce employee shareholders. The Bill will now be returning to the House of Commons where the Government will decide whether to accept the defeat or disagree and re-introduce the clause. We therefore await the response of the House of Commons.

If you wish to learn more about the upcoming changes to employment law and how they may affect your business, our employment roadshows are taking place on 14, 15 & 16 May and 21, 22 & 24 May 2013. To book a place please contact Jude Tarrant on 01244 405418 or by email to [email protected]. For further advice or information in relation to any employment law issues, please contact Helen Watson on 01244 405565 or by email to [email protected].


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