UK: Employment Law For 2012 – Major Forthcoming Changes

Last Updated: 31 January 2012
Article by Adam Grant

2012 promises significant changes for employers and employees alike.  In Autumn 2011, the Government proposed two major changes to employment law. An increase in the qualifying period for unfair dismissal claims and a wholesale change to Employment Tribunal practices. The aim of the changes is to encourage employee recruitment and to cut red tape for businesses. We set out below some key matters of which you should be aware.

Compensation limits (1 February 2012)

As from 1 February 2012, a statutory week's pay, which is most commonly used to calculate statutory redundancy pay and an unfair dismissal basic award, will increase from £400 to £430. The maximum compensatory award for unfair dismissal claims will also increase from £68,400 to £72,300.

Statutory rates of pay (April 2012)

From April 2012, statutory sick pay will increase from £81.60 to £85.85 per week. Statutory maternity, paternity and adoption pay will increase from £128.73 to £135.45 per week.

Unfair dismissal qualifying period (6 April 2012)

It is expected that as from 6 April 2012, the qualifying period for unfair dismissal claims will increase from one to two years. There is confusion as to whether the increased qualifying period will apply to existing employees, i.e., those with less than two year's service at 6 April 2012. However, the last time that the qualifying period changed it applied only to those employees engaged on or after the date that the change came into force. The commentary suggests that the same approach will be taken in this instance. Therefore, if employers are contemplating recruitment drives they may wish to hold off until April to take advantage of the change.

From a practical perspective, the change may pose problems for employers. Firstly, it may prove harder to recruit since many employees, particularly in the current economic climate, will not be prepared to risk a two year period with no unfair dismissal rights. Secondly, disgruntled employees who do not have two years' service may try to bring other claims - citing discrimination, whistle-blowing, or trade-union reasons, for their dismissal - in order to avoid the service requirement. This already happens when employees have less than a year's service. These claims, while they may be unsuccessful, will be more complex and consequently more expensive to defend.

Finally, there is a possibility, as happened in 1992, that the two-year rule could be challenged on the basis that it is indirectly age and/or sex discriminatory. It has already been established that more women than men have less than two years' continuous service; the same is true of younger workers. If a similar challenge is brought, employers may face years of uncertainty before the courts decide whether this indirect discrimination can be justified.

Key Employment Tribunal Changes (starting from April 2012)

Deposit Orders

Although a seldom used power, if a Tribunal believes that a claim has little prospects of success they can order the individual to make a payment into court of up to £500 which may be forfeited if the case is lost. It has been suggested that this figure will increase to £1,000 in April 2012 in order to deter vexatious litigants.

Costs awards

Another change expected in April 2012 is that the maximum amount of legal costs a Tribunal can award to the successful party will increase from £10,000 to £20,000. Again, this is to discourage parties from bringing misconceived proceedings. However, this will still require a change in the Tribunal's approach as they are often reluctant to award costs.

Tribunal fees

It is proposed that from 2013/2014 employees will have to pay to bring a claim. The government has proposed two different fee charging structures which are currently being consulted upon:

  1. An issue fee and a hearing fee, the amount of which would depend on the nature of the claim. For example, in an individual unfair dismissal claim, the claimant would have to pay an issue fee of £200 and a hearing fee of £1,000.
  2. An issue fee only, the amount of which will depend on what the claimant states their claim to be worth. For example an individual unfair dismissal claim worth less than £30,000 would cost £500 to issue and one worth more would cost £1,750.

The hope is that individuals will think carefully before embarking on litigation. The downside is that if the individuals do decide to issue a claim, it may be harder to persuade them to withdraw with no payment as they will not wish to be left out of pocket by having to cover any Tribunal fees themselves.

Pension auto-enrolment (October 2012)

New laws coming into effect in October 2012 will require UK employers to automatically enrol eligible jobholders into a pension scheme and pay mandatory minimum contributions. The government is staging implementation over four years from 1 October 2012, with employers separated into bands according to their payroll size. Larger employers will be starting first and the initial wave of employers will be able to voluntarily start auto-enrolment as early as July 2012.

National Minimum Wage (October 2012)

Limits will be reviewed and potentially increased.

Other possible key changes

TUPE 2006

The BIS is currently seeking views on the effectiveness of TUPE 2006 given concerns that the regulations are overly bureaucratic. Particular focus will be on service provision changes, insolvency proceedings and collective redundancy consultation. The call for evidence will close on 31 January 2012 and the evidence will be used to formulate policy proposals that will be put forward for formal public consultation.

Holiday

An amendment may shortly be made to the Working Time Regulations 1998 to clarify when leave which cannot be taken due to absence on maternity, adoption, parental and/or paternity leave can be carried over to the next leave year. 

Disputes and Litigation

Matters currently under review include:

  • Financial penalties of up to £5,000 for employers that lose at Tribunal.
  • Extension of the Acas Pre-Claim Conciliation scheme. Claimants will potentially be required to submit details of their dispute to Acas before filing a claim. Acas will have a duty to conciliate rather than a power.
  • Compromise Agreements to be simplified and to be renamed "Settlement Agreements".
  • Consultation on a Rapid Resolution Scheme which could potentially provide quicker and cheaper determination of low value straightforward claims.
  • It has been suggested that the whistleblowing rules should be amended so that disclosures about breaches of employment contracts are no longer covered.
  • The Government intends to consult on the introduction of "protected conversations" which will potentially allow an employer and employee to have frank and open discussions before disputes escalate.
  • The Government will be seeking views on a proposal to introduce "compensated no-fault dismissal" for companies with ten or fewer employees.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.