Member Article

Employers need to know: changes to employment law

April sees a number of changes to employment law coming into force in the UK. Here, Leon Deakin, employment associate at Thomas Eggar LLP sifts through the Coalition Government’s rhetoric to provide a digestible summary of the Top 5 changes coming into force this April and exactly what they mean for employers.

1. Qualifying period for unfair dismissal increases
On 6 April 2012, the qualifying period for bringing an unfair dismissal claim (in most cases) increases from one year to two years. This change only applies to employees who start a job on or after the 6 April. Existing employees will continue to be governed by the old rules. This is one of the Coalition’s flagship changes and they believe it will reduce the volume of claims and also encourage businesses to recruit as they will have longer to assess the ability of new employees.

Whilst this may initially sound positive for employers who will now have up to 2 years during which it is much easier (and lower risk) to terminate employment, as the requirements to have a fair reason or follow a fair procedure of dismissal are not present, it seems doubtful whether this change will achieve the stated aims. In particular, the general consensus amongst those I have spoken to is that one year is definitely enough time to assess an individual’s suitability. More importantly, there are numerous other claims individual’s will still be able to bring with less than 2 years’ service including various discrimination and whistle blowing claims. Indeed, over the last few years we have seen a rise in such claims by individuals who are not protected from unfair dismissal but wish to strike back at their ex employer. As these claims tend to be more complex and therefore expensive to defend there could be a nasty sting in the tail for employers and the Coalition.

2. Employment tribunal procedure reformed
On 6 April 2012, certain changes to tribunal procedures will come in. The main ones are the increase in the maximum amounts of deposit and costs orders which can be granted by the Employment Tribunal. Employment judges will be able to hear unfair dismissal cases alone and also witness statements can be taken as read (i.e. they don’t have to be read aloud at the hearing by the witness). Again the stated aims are to more accurately reflect the costs of defending a claim and also to speed up the whole Tribunal process.

As far I am concerned this is all positive news for employees, employers and anyone involved in the process! Whilst the chances of getting a deposit or a cost order remain low, an increase in the amount which can be awarded was long overdue. Similarly, judges have long been able to hear cases alone in many other forums so why not the Tribunal? Indeed, given the difficulty of finding enough panel members this can only assist in getting more cases heard on time. Along the same lines, it often seems unnecessary for a witness to read their statement aloud when everybody having a good read before hand is just as effective. The witness will still be cross examined on the contents so if there is any doubt as to the accuracy or truth this can be contested at that point.

3. Accident reporting requirements
On 6 April 2012, the required period of incapacity following an injury caused by an accident at work, which triggers an employer’s requirement to report the accident increases from more than three days to more than seven days. In addition, the deadline by which the employer must report the accident increases from 10 days to 15 days.

Again, as far as I am concerned, thumbs up! The message from businesses has been ‘cut the red tape’, especially in the area of health and safety. Of course, this should not be at the expense of safety but in this case the relaxing of the law means employers only need to report more serious accidents.

4. Definition of independent adviser for compromise agreements clarified
The Equality Act is amended on 6 April 2012 to finally confirm that an employee’s representative can be an independent adviser for the purposes of signing off a compromise agreement. As you may be aware, one of the conditions of ensuring a compromise agreement is valid is that the employee has received independent advice on the terms of the agreement.

Another sensible change but one I am loathe to give too much credit for as it is simply rectifying the previous Equality Act wording which was at best unhelpful and at worst contradictory on this point. However, it means we can all breathe a sigh of relief and stop hoping that no one challenged whether a compromise was actually effective in preventing claims under the Equality Act.

5. Statutory maternity, paternity, adoption and sick pay increase
On 1 April 2012, the weekly rate of statutory maternity, paternity and adoption pay increases from £128.73 to £135.45. On 6 April 2012, the weekly rate of statutory sick pay increase from £81.60 to £85.85.

Self-explanatory and, given rising costs of living all round, a ‘no-brainer’!

Conclusion
This April, I would give the Coalition Government 4 out of 5 for its modifications to employment law. Ironically, it is the headline making increase to the unfair dismissal qualifying period which I think will make the least difference to employers and employees in practice. However, the other employment changes are either common sense or a welcome reduction in unnecessary administration for employers.

This was posted in Bdaily's Members' News section by Thomas Eggar .