Guernsey: Good Friday UK Employment Law Reforms Mean A Happy Easter For Employers

Last Updated: 1 May 2012
Article by Emma Parr

Last November we announced that the UK Government was proposing employment law reforms – those reforms are now in force.

6th April 2012 saw the implementation of a host of UK reforms ranging from an increase in the qualifying period for an unfair dismissal claim to new rates of statutory maternity and sick pay, plus amendments to its Employment Tribunals rules of procedure.

The UK Government appears to have embarked on this frenzy of changes as it believes it will assist businesses and boost the economy. By reducing an employer's obligations to its staff it is anticipated that there could be net savings to industry of more than £10 million per year. Despite the positive spin placed on the reforms by the Government, some political commentators suggest the reforms will only seek to erode (or at best weaken) an employee's protection in favour of the employer; the main concern being the extension of the qualifying period from one to two years' continuous employment for an employee to bring an unfair dismissal claim, or seek a written statement of reasons for dismissal.

Working parties and, in particular, the trade unions, argue that this increase is nothing more than a green light for an unscrupulous employer to terminate an employee's contract of employment within their second year of service, creating a 'hire and fire at will' culture. They claim that thousands of employees could be left in a vulnerable position with little or no statutory protection. Effectively, 2.7 million workers across the UK could face an increased risk of job loss with no recourse to the Employment Tribunal.

It is important to point out, however, that this reform will only apply to those who enter into a contract of employment on or after 6th April 2012; those whose employment started before this date will remain subject to the previous qualifying period of one year's continuous service.

Other reforms include allowing, for the first time, employment judges to sit alone in Tribunal hearings, and no longer with a panel of lay members. According to the cynics amongst us, this reduction in salary expenditure is just another cost-cutting exercise by the UK Government. Those in favour of this reform say it will simply speed-up what is fast becoming a complex and lengthy procedure (long since regarded as the 'litigant in person' friendly forum); hearings can now be convened sooner rather than later and parties can now see a quicker response time for Tribunal decisions. It remains to be seen whether this reform will be successful - even its proposers have their doubts, suggesting a progress review in twelve months.

There has also been an increase of £6.72 in the weekly rate of statutory maternity, paternity and adoption pay with eligible employees being able to claim up to £135.45 per week. Statutory sick pay has also seen an increase of £4.25 entitling those eligible employees to claim up to £85.85 per week. It definitely was a good Friday for those in the UK who will reap the benefits of the increases, but not such good news for the overall tax payer's purse strings, which may be tightened just that little bit further.

Other 'not such good news' for UK employees are the potential costs and filing fees that could now be incurred in pursuing a grievance through the UK's Employment Tribunal. Gone are the days of free filing. Now, a claimant in the UK will be required to file a fee of £250 simply for lodging the claim; a further £1000 will then have to be paid by the claimant should the grievance proceed all the way to a hearing. Surely such measures will only seek to prevent genuinely aggrieved employees from seeking redress; hardly evidence of employee protection, but still positive news if the Government is trying to keep Tribunal hearing numbers to a minimum.

I guess for the UK employer it was indeed a good Friday, just not such a Happy Easter for its employee. Generally speaking, it is likely to be some time before we know the true impact of these radical reforms, but Collas Crill will continue to watch the position with interest. Who knows whether these reforms will ever make their way across the Channel but given the States of Guernsey's intention to overhaul our existing employment laws in the next couple of years, I suspect that there will be much speculation about their progress and many will be watching anxiously. Let's hope that Channel Islanders will continue to enjoy a good Friday when employment law reforms come up for States' deliberation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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