UK: Employment Law – Forecast Of 2010

Last Updated: 5 February 2010
Article by Rima Mehay

This year looks like it is going to be another exciting and busy time in the increasingly fast moving world of employment law. This article is a look at what we can expect to see in 2010.

"Sick" Notes

The Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) Amendment Regulations 2010 are expected to come into force in April 2010. These Regulations scraps the current "sick note" system which has been in place since 1948 and replaces it with "fit notes".

The Government has overhauled the current sick pay system in an attempt to encourage individuals, particularly those on long term sick, to return or stay in work. The emphasis is now very much on rehabilitation and phased returns to work. These Regulations change the format of the medical statement so that GPs can record whether or not a patient is fit for some work and whether changes could be made to the workplace or role to allow the employee to work.

The Government have intimated that guidance for employees, employers and healthcare professionals will be available shortly but there is scepticism particularly from the medical industry about whether this new scheme will work in practice. The changes will require a significant shift in culture and at the moment, many GP's do not appear to be aware or fully up to date with the changes. What is clear is that GP's will need to, under the new system, engage much more with employees and the requirements of their jobs in order to make the necessary recommendations to make this new scheme work.

The Government has said that it will evaluate the new system and publish its findings in 2012/13 although this review will of course depend on the result of the general election expected to take place in May this year.

Equality Bill 2009/2010

The Equality Bill continues to make its way through Parliament and is expected to be one of the most important pieces of legislation coming into force in recent years. It is expected to receive royal assent in Spring and come into force in October. The Equality Bill consolidates existing discrimination law into a single piece of legislation and also introduces a number of reforms including outlawing of the use of clauses by private sector employees (with at least 250 employees) preventing employees from disclosing their pay details to colleagues and third parties. Organisations should therefore ensure that their equal opportunities and diversity policies are reviewed this year.

Right to Request Time Off for Training

The Apprenticeship, Skills, Children & Learning Act 2009 comes into force on 6 April 2010 and creates a right for employees of companies with 250 or more employees to request unpaid time off work to undertake study or training. This will be extended to all companies irrespective of size in April 2011. Employees must have at least 6 month's service and be able to show that the training will improve their effectiveness at work and the performance of their employer's business. Employers will be obliged to reasonably consider requests received and must follow the statutory procedure for dealing with such requests (similar to flexible working requests). Employers may be able to refuse a request where there is a good or valid business reason for doing so.

Paternity Leave and Pay

Legislation is set to come into force in April 2010 which applies to babies born on or after 3 April 2011. Under this new legislation, fathers will be able to take up to 26 weeks' additional paternity leave (in addition to the two weeks they already are entitled to) before child's first birthday if the employees' spouse has returned to work and has not taken the whole of her maternity leave.

This will allow new parents to effectively "share" the first year of their child care between them, although the paternity leave in weeks 39 – 52 will, as for maternity leave, be unpaid.

Retirement Age

The Government has brought forward its review of the default retirement age in the UK to this year. It has commissioned a Survey of Employers' Policies, Practices and Preferences relating to age and is currently in the process of collating information and evidence from interested parties about the operation of the default retirement age in practice, the impact of abolishing the default retirement and how costs associated with removing or raising the default retirement age could be mitigated.


In 2009, three investment bankers were successful in a claim against Dresdner Kleinwort (now owned by Commerzbank) in their claims for non payment of contractual guaranteed bonuses worth a total of €13 million. Two further groups of former bankers have also commenced High Court proceedings for withheld guaranteed bonuses in the region of €50 million. It will be interesting to see the Court's approach to these further claims and whether they will continue to adopt established principles in the light of the current economic climate and the feeling of the general public about payments of huge bonuses to bankers, when taxpayer's money was used to "bail-out" those banks during the recent banking crisis.

Financial Services Bill

This Bill, announced in the Queens Speech in 2009, is intended to improve corporate governance and remuneration practices in the financial sector and allows the FSA to regulate remuneration by prohibiting certain types of remuneration, making contractual terms void and allowing for claw back of bonuses. At present the Bill is in the House of Lords for consideration and the Government has indicated that it intends to pass this Bill before the election takes place this year.

New Statutory Limits

Statutory Adoption, Maternity and Paternity Pay will rise from £123.06 to £124.88 per week as of April 2010. Statutory Sick Pay will remain at £79.15.

The maximum compensatory award for unfair dismissal will fall from £66,200 to £65,300 in respect of dismissals on or after 1 February 2010 due to the drop in RPI. This is the first time that the unfair dismissal compensatory award cap has been reduced. The statutory cap for a week's pay (used in redundancy and unfair dismissal calculations) will remain at £380.

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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