On 1 October 2012 the first phase of auto-enrolment under the Pensions Act 2008 began for employers with more than 120,000 employees who are now required to enroll their employees into a qualifying workplace pension scheme. This will then be gradually phased in for all employers over 4 years, with staging dates based on the number of employees in the employer’s PAYE scheme as at 1 April 2012. By this time next year all employers with more than 800 workers on the PAYE will have needed to auto-enrol their employees. Employers therefore need to act fast if they have not already.
An employee who opts out can re-join at any time and the Employer has a duty to automatically enroll qualifying workers back into the scheme every three years, this means that employers need to keep careful records of anyone opting out so they do not fall foul of the rules.
Also on 1 October the National Minimum Wage increased with the standard adult rate for those aged 21 and over rising by 1.8% to £6.19 per hour
Due to come in:
Employment Tribunal fees: The Government has announced its intention to charge claimants fees to bring and continue claims in the employment tribunal. The fees, to be introduced in summer 2013, will be charged in two stages; the first at the issue of the claim and the second prior to the hearing. The amounts charged will depend on the complexity of the claim brought and there will also be a fee structure for multiple claims. It is intended that those on low incomes will not have to pay the fees.
Parental leave: There will be an increase in parental leave in March 2013, so that both mothers and fathers will be able to take up to four months unpaid parental leave for each child for the purpose of caring for that child whilst continuing to benefit from statutory rights during the period of absence, such as the accrual of statutory holiday entitlement The government proposed various other changes to unpaid parental leave including the removal of the requirement for a qualifying period of a year’s service and extension of the age until which parental leave may be taken.
Up for debate:
The Enterprise and Regulatory Reform Bill was published on 23 May 2012. The principal areas of proposed reform for employment law are:
– Extend protected conversations so that many discussions about terminating employment may not be referred to in subsequent unfair dismissal proceedings. Whilst the principal of the Government’s position may be commended, in that it is intended to allow an employer and employee to talk frankly to resolve the issue, it is thought there will be dispute about the application of the rules, leading to satellite litigation. It may however encourage employees who are aware that they are underperforming to actually approach the employer to discuss a settlement, this is especially so if there is a financial incentive for doing so and it may be less stressful for an underperforming employee to take control in this way rather than going through the process of performance management.
– Extension of the early conciliation role of ACAS, with claimants being required to lodge claims with ACAS before being allowed to submit a claim. If the parties are willing, they can then look to agree a settlement without the need for a hearing. Lodging the claim with ACAS will have the effect of “stopping the clock”, this may of course just lead to satellite litigation in respect of limitation periods.
– A power for the Secretary of State to amend the maximum compensatory award for unfair dismissal. This could be the lower of either; between one and three times’ median annual earnings; or a number of weeks’ pay (not less than 52 weeks). Furthermore, different amounts can be specified for different kinds of employer, e.g. a lower amount could be set for small businesses. .
– A discretionary power to make a financial penalty against an employer who looses at tribunal. The amount would be 50% of the award, but this would be capped at £5,000 and reduced by 50% if paid within 21 days.
– ‘Whistleblowing’ claims must be made in the public interest. On the face of it this looks to be a good move as it looks to narrow the scope of the protection to that which originally was intended – namely to encourage reporting of wrongdoing or dangerous practices through internal channels with the aim of helping to avoid serious accidents, fraud, regulatory breaches or financial scandals. It may instead however have the effect of encouraging litigation by way of interim applications to assess whether something is “in the public interest”.
– A ‘rapid resolution’ scheme for low value and simple claims will be introduced whereby, if all parties provide written consent, these claims can be determined by a legal officer, without a hearing.
Under review over the next 12 months:
– Unpaid leave for fathers to attend ante natal appointments;
– 18-week maternity leave followed by 34-week shared period of leave;
– Extending the right to request flexible working to all employees with 26-weeks’ continuous employment and a requirement to consider flexible working requests “reasonably”;
– A statutory right to carry over holiday to next leave year if they have been:
- unable to take holiday; or
- on maternity, adoption, parental, or paternity leave.
– Allowing employers to “buy out” 1.6 weeks leave under the Working Time Regulations, and to require employees to carry over the 1.6 weeks leave if there are overriding business need
– A power for employment tribunals to order publication of pay audits following a finding of sex discrimination in relation to pay.
A review of employment tribunal rules with the intention to ensure cases are managed proportionately, quickly and efficiently including:
- An early review of cases to:
- make orders about how the case should be managed;
- consider if a claim or a defence should be struck out because it does not have a reasonable prospect of success.
- Allowing tribunals to set a time limit for oral evidence and legal submissions, that can be enforced by guillotine where necessary.
- Guidance from the Employment Tribunal Presidents to advice users on what to expect procedurally and to improve consistency between judges.
- Emphasising alternative dispute resolution, either through ACAS or judicial mediation, to encourage a cultural change towards settlement of disputes.
- Allowing Employment Tribunals to assess cost awards above £20,000 (rather than sending them to the county court as they do at present).
- Various procedural improvements on managing cases, including the process for default judgements, dismissal proceedings, and extra-jurisdictional issues.
BIS propose to hold a consultation on the proposals later this year, following which we can expect Parliament to pass secondary legislation bringing the new rules into force.