Newsflash – Looking ahead to 2013

government reformsHappy New Year and welcome to 2013 – a busy year for HR/employment law changes. To keep you up to speed with these we round-up the most significant below.

February 2013

Increase in maximum Employment Tribunal awards from 1 February 2013:

The increases will be:

  • a week’s pay: £450 (increased from £430), used for calculating statutory redundancy payments and the basic award; and
  • unfair dismissal compensatory award: £74,200 (increased from £72,300).

This now means that the maximum unfair dismissal award can be £87,700 (maximum basic award plus maximum compensatory award).

Importantly, the Government also last week published its response to the “Ending Employment” consultation which consulted on limiting the cap on unfair dismissal. The response confirms that it will go ahead with its plans to limit the cap on unfair dismissal claims to the lower of the current statutory cap (£74,200 from 1 February) or the claimant’s annual net salary. The intention is to introduce this new requirement by Summer 2013.

March 2013

Increase to unpaid parental leave entitlement:

  • This will increase from 13 to 18 weeks in total per child, but will remain limited to a maximum of four weeks per year.

Removal of employer liability (under the Equality Act):

  • This removes employer liability for acts of harassment by a third party against an employee.

April 2013

Increase in weekly rate of statutory maternity/paternity/adoption pay and sick pay:

  • statutory maternity/paternity/adoption pay increase from £135.45 to £136.78.
  • weekly rate of statutory sick pay will rise from £85.85 to £86.70. (According to the 2012 Autumn Budget Statement, these rates will increase by 1% a year for three years from April 2013).
  • weekly earnings threshold for both of these above payments rises from £107 to £109.

Implementation of reforms to collective redundancy:

These include reducing the 90 day minimum consultation period to 45 days for collective redundancies involving 100 or more employees. The Government has also stated that it intends to produce new ACAS guidance on collective redundancies. Fixed term contracts, which have reached their expiration point, are to be excluded from consultation.

Introduction of “employee shareholder” contracts:

As explored in our November and December 2012 newsletters, the Government proposes that employers can offer a new type of contract whereby employees give up some of their employment rights in exchange for shares in their employer worth between £2,000 and £50,000, on the basis that any gains on those shares will be exempt from capital gains tax.

Protection of whistle-blowers:

The Employment Rights Act 1996 will be amended to mean that disclosures are only protected if they can reasonably be said to be ‘in the public interest’. A worker will be unable to bring a whistleblowing case relating to a breach of their own contract that is not in the public interest.

New Employment Tribunals Rules of Procedure will come into force:

Which of the proposals, including the introduction of a new sift stage and the combining of case management discussions and pre-hearing reviews into new preliminary hearings, will be adopted is not yet clear as the Government has not announced its response to the BIS consultation which ended on 23 November 2012.

Summer 2013

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

Other expected changes for 2013

The following provisions in the Enterprise and Regulatory Reform Bill 2012-13 are due to be introduced:

  • mandatory pre-claim ACAS conciliation;
  • penalties for employers who lose Tribunal claims;
  • reforms to the EHRC;
  • changes to Tribunal procedure and the orders a Tribunal can make;
  • EAT judges to sit alone;
  • the use of settlement agreements to replace compromise agreements as a means to end the employment relationship; and
  • pre-termination negotiations comprising protected conversations to be inadmissible in unfair dismissal proceedings.

In addition, the Government has just last week published its response to the “Ending the Employment Relationship” consultation, which sets out details of how it plans to implement, and assist with, the change from settlement agreements to compromise agreements. We will update you further on this response in our January newsletter, coming soon.