2014 is set to be another busy year in the world of employment law. As well as the on-going ‘root and branch’ Employment Law review by the government, a number of judicial decisions with major repercussions for future workplace relations are set to be announced.
Arpita Dutt, a senior partner with City employment law specialists BDBF, looks at some of the more far reaching changes expected and argues that 2014 is bound to be another memorable one.
2013 kept lawyers extremely busy with significant changes implemented as part of the government’s overhaul of the country’s employment laws.
A major shake-up of the employment tribunals system was arguably the most controversial change. Most widely criticised, was the introduction of fees of up to £1200 for staff to take former bosses to a tribunal.
This year could see some significant backtracking from the Government after a legal challenge was mounted by trade union giant UNISON. Union bosses branded the introduction of fees as illegal and a serious impediment to a means of redress for disgruntled former staff.
Last year the High Court heard a judicial review application from Unison and a judgement is set to be issued in the coming weeks. A similar legal challenge is also underway at the Court of Session in Scotland.
The government has promised that fees will be repaid with interest if they are ruled to be illegal. So there is bound to be a lot of interest from all sides on the outcome of the legal challenge. Watch this space!
The on-going review also decided that from April this year, employees will be required to consult with the arbitration service ACAS in a bid to resolve grievances without resorting to litigation.
It will be interesting to see how successful this new step will be in encouraging pre-action settlement. It could prove popular both with employees seeking to avoid paying prohibitive tribunal fees and for bosses wishing to avoid costly legal bills. However, some argue that it will be nothing more than another piece of unnecessary red-tape.
Zero Hours Contracts hit the headlines in 2013 over claims they were unfairly exploiting workers. In Zero Hours Contracts employers are not required to provide staff with minimum working hours and employees are not under any obligation to accept any of the hours offered.
Supporters of the controversial contracts claim they offer flexibility to both workers and employers. But opponents claim they are open to abuse from unscrupulous bosses, particularly those contracts with exclusivity clauses that have no guarantee of work and impose restrictions on working elsewhere.
Such was the outcry the government felt compelled to act and as a result of the widespread condemnation ordered a consultation in December last year. The eagerly awaited findings of the consultation process are due in the spring. Hopefully, it will recognise that Zero Hours Contracts do have a useful role to play in the modern workplace as long as they are transparent and ensure equality for both workers and employers alike.
One outcome due this year which could have serious implications for redundancy laws is the government’s bid to have an Employment Appeal Tribunal finding on ‘protective awards’ overturned.
When High St giant Woolworths went into liquidation in 2009 with the loss of thousands of jobs, it prompted a major change in redundancy legislation. Under UK law, a duty to inform and consult employees as a group is triggered when an employer is proposing to make 20 or more redundancies at ‘one establishment’ in a 90 day period. If the duty is breached, a ‘protective award’ can be claimed of up to 90 days gross pay per employee.
This appears to be at odds with the EU Directive (on which the UK legislation was based) which does not refer to employees being at “one establishment” in order for the consultation obligations to apply. Therefore, on behalf of Woolworths’ employees, two unions brought claims for ‘protective awards’ on the grounds that the liquidators had failed to consult with employee representatives.
The case hinged on whether each Woolworths shop was an establishment in its own right. If each shop was not an establishment, then the duty to consult was not engaged in respect of stores with less than 20 proposed redundancies. The Employment Appeal Tribunal ruled that the UK provisions should be interpreted consistently with the directive and the words “at one establishment” should be disregarded.
Therefore, where an employer proposes 20 or more redundancies across its organisation within a 90 day period, it will have collective consultation obligations even if the number of employees proposed for redundancy at each of its sites is fewer than 20. This decision has been appealed by the Government and will go to the Court of Appeal in January 2014.
If this decision is upheld by the Court of Appeal, it will usher in substantial changes with significant consequences for employers with multiple sites.
In order to avoid the risk of expensive collective claims, employers need to ensure that redundancies across the business are monitored centrally and, where necessary, that the collective consultation redundancy obligations are met. Employers who fail to comply with equal pay legislation will also be targeted this year. Those who have lost an equal pay claim may be forced to undergo an ’equal pay audit’. Those which fail to do so can expect to be subject to a punitive £5000 fine.
A consultation process was carried out last summer with the findings expected to be published soon with ‘equal pay audit’ legislation being implemented in October 2014. During the consultation process it was discussed whether inequality findings should be made public in a bid to deter unscrupulous employers. So it will be of great interest to see if the government adopts this tactic when the legislation is finalised.
It’s clear to those who advise on employment law that 2013 was a year of great change with the ramifications set to be felt for many years to come, although it’s very early, it looks as though 2014 is set to be another memorable year for employer/ worker relations.