UK: Employment Law Reforms And Other News

The implementation of a variety of measures linked to the Government's deregulatory drive continues apace. We outline below the main developments.

Changes to employment tribunal rules

New employment tribunal rules of procedure have been published and will apply to all proceedings in employment tribunals on or after 29 July 2013, regardless of when the claim was lodged. The changes to the rules were considered in the Davenport Lyons June E-ployment Bulletin and include:

• Giving tribunals more power to reject claims where they are not presented on the correct form or fail to include certain information;
• Identifying and disposing of weak cases earlier by improving the paper sift and strike out provisions;
• Merging case management discussions and pre-hearing reviews into one preliminary hearing;
• Giving wider discretion to run final hearings as employment judges see fit;
• Removing the requirement for cost orders of over £20,000 to be referred to the County Court.

Introduction of tribunal fees

Tribunal fees have been introduced for all claims issued on or after 29th July and vary depending on whether the claim is classed as a type A claim or a type B claim. Type A claims are generally for sums due on termination of employment, for example, unpaid wages, payment in lieu of notice and redundancy payments. Type B claims include those relating to unfair dismissal, discrimination complaints, equal pay claims and whistleblowing claims.

In the EAT the fees are:

The Government has said that it will protect access to justice for those who cannot afford to pay the fee by extending the fee remission system which is currently run by HM Courts and Tribunals Service. We await confirmation of the full details on fee remissions.

It should also be noted that Unison announced on 17th June 2013 that it is lodging an application in the High Court for judicial review of the proposed introduction of tribunal fees. The case is scheduled to be heard at the end of October. If such a review were to have any success, implementation of the scheme could be delayed.

Enterprise and Regulatory Reform Act 2013

The Bill received Royal Assent on 25th April 2013 and the Government has published a guide to the Act. The Government has published various implementation dates ranging from 25 June 2013 to April 2014. 

25 June 2013 (now effective)

• EAT hearings to be held by judges alone with no lay members.
• Qualifying period of two years' continuous employment removed where the dismissal relates to an employee's political opinion or affiliation.
• Changes to whistleblowing: disclosure must be in the public interest, compensation can be reduced if the disclosure was not made in good faith and definition of worker widened.

29 July 2013 (now effective)

• Reduction in cap on compensatory award for unfair dismissal – the lower of £74,200 or an actual week's pay multiplied by 52.
• Provisions relating to settlement agreements.
• Vicarious liability for employers whose staff victimise whistleblowers.

1 October 2013 (now effective)

• Provisions relating to third-party harassment removed from Equality Act 2010.

6 April 2014

• ACAS Early Conciliation Scheme introduced.
• Repeal of discrimination questionnaire.

Employee shareholder status

The Growth and Infrastructure Bill has also received Royal Assent and becomes the Growth and Infrastructure Act 2013. Section 27 has introduced employee shareholder status with effect from 1st September 2013. As reported in previous Bulletins, employee shareholders will agree to give up unfair dismissal rights, statutory redundancy pay, the right to request flexible working and time to train. In addition, employee shareholders will have to give a minimum of 16 weeks' notice of early return from maternity, adoption and paternity leave. No income tax will be charged on the first £2,000 of share value received. Capital gains tax relief will be provided on disposals of shares worth up to £50,000 on receipt.

Changes made during the legislative process include a requirement for employers to give prospective employee shareholders a statement explaining the employment rights they are giving up and giving information about the rights and conditions attaching to the shares. The employee must receive independent legal advice, the reasonable costs of which must be paid by the employer. There will be a seven-day cooling-off period during which time the employee can change their mind about accepting an employee shareholder contract. A further amendment provides that Jobseeker's Allowance will not be withdrawn from someone who refuses an employee shareholder position. 

Equal pay audits

The Government has published a consultation on its proposal to introduce mandatory equal pay audits from 2014 where there has been a clear breach of equal pay law. The consultation closed on 18th July 2013.

Changes to minimum wage

New rates for the National Minimum Wage were introduced on 1st October 2013. The adult rate will increase from £6.19 to £6.31; the rate for those aged 18-20 will increase from £4.98 to £5.03; the under 18s rate will increase from £3.68  to £3.72 and the rate for apprentices from £2.65 to £2.68.

More changes in the pipeline

On 12th July 2013 the Government published a Ministerial Statement by Jo Swinson at the Department for Business, Innovation and Skills. It includes:

• the Government's response (see this link) to the consultation on reforms to the rules governing the Recruitment Sector. This proposes replacing the current legislation with "a new regulatory framework which removes some of the burden from business but continues to protect people who are looking for work. Regulation in the agency sector will be minimised and, for the most part, focused where workers are most at risk of exploitation."
• The Government's response (see this link) to the consultation on how Early Conciliation will work in practice. We will consider this in more detail in the next Bulletin.
• Publishing a Call for Evidence (see this link) on the whistleblowing framework.

The Call for Evidence on whistleblowing seeks views on whether:

• The categories of disclosure which qualify for protection are still effective in capturing all instances of wrongdoing;
• The methods by which the disclosure is made are still relevant and effective;
• The list of prescribed individuals/bodies, i.e. to whom the disclosure can be made, captures the individuals and bodies sufficiently to ensure the whistleblower benefits from the protection; and
• The coverage of the definition of worker is sufficiently broad to capture all those that need to be protected by the framework.

The Call for Evidence closes on 1st November 2013.

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