UK: Employment Law 2012 Looking Ahead To The Changes

Last Updated: 19 March 2012
Article by Alison Wallace

New qualifying period for unfair dismissal claims

This will increase from 1 year to 2 years for new employees commencing work with an employer with effect from 6 April 2012. It is estimated that unfair dismissal claims will fall by 3000 cases per year and thus will encourage employers to recruit and retain new staff but more importantly claims not needing any qualifying service could rise as a result. This comes at a time when the Courts have recently extended the geographical limit of the UK's unfair dismissal legislation to an employee who only worked on rotation in Libya.

Parental leave

The increase from 13 weeks to 18 weeks is now being delayed until March 2013. The Government is still consulting on shared maternity leave proposals after 18 weeks so a mother and father can share the remaining 34 weeks' leave.

Executive remuneration

Transparency and disclosure are the current byword both in public and private organisations. With statutory controls, regulatory provision and contractual rules, the balancing of employee performance, shareholders' returns and public accountability becomes ever more difficult. The Government is therefore looking at clearer structures linking pay policy to performance. There is also a move to increase worker influence on setting executive pay.

Bonus culture

This has become a PR rather than a legal issue with both public and private employers seeking to downplay substantial rewards particularly in the financial sector against a background of austerity measures elsewhere. The shadow of EU reform also remains but most bonus schemes work well in motivating and rewarding staff, providing they are operated fairly.

Early mediation and conciliation

The Government is consulting on proposals to reduce the number of claims against employers of all sizes. Instead of confrontation or litigation, mediation and conciliation will be offered. The Government is proposing compensated no fault dismissals for businesses with 10 or less employees. Additionally, fees are to be introduced for anyone bringing a claim in a Tribunal and penalties for employers who breach employee rights. Once an unfair dismissal case is before the Tribunal after 6 April 2012 an employment Judge can sit alone to hear the case which should speed up the process of claims that are not settled.


The Government aims to close the loophole whereby employees could blow the whistle on breaches to their own contract terms which was never envisaged in the original legislation, in order to deter unmeritorious claims.

Cost awards

The cap on the amount of costs that may be awarded to a successful litigant in tribunal claims will rise to £20,000 with effect from 6 April 2012. How much of a disincentive this will be remains to be seen.

Pension auto enrolment

This will commence from 1 October 2012 depending on size of business. Employers will be staged into the scheme. However for the first time, employers will be required to make a minimum contribution to an eligible employee's pension of up to 3% for employees earning more than £8,105 per annum, in line with the PAYE threshold. Workers can however opt out of the auto enrolment.

Disclosure of pay gap information

Private sector gender pay gap information is still a long way off but new proposed legislation by the Government may require Tribunals to order an employer to conduct a pay audit where that employer has been found to have discriminated in pay matters because of gender. Best practice suggests that pay audits are carried out on a regular basis by businesses in any event.

Redundancy consultation periods

The Government is still consulting on reducing the minimum period for collective consultation from 90 days to 60 or 45 or possibly 30. Many businesses find the 90 day rule unworkable when cash flow becomes an issue. The Government is also considering at what stage the consultation period is triggered. Is it either when a strategic decision or an operational decision is made to close the business or to put into effect a downsizing of the workforce or when an employer is proposing to make a decision that will lead to collective redundancies is made?


TUPE can easily be described as overly bureaucratic and one proposal being reconsidered by the Government is that the buyer should be able to speak to sellers' employees pretransfer about potential redundancies once the business has been transferred. There are more and more cracks appearing in the TUPE legislation for protecting employees' jobs particularly where there is service provision change and the services are fragmented post transfer or in prepack disposals by administrators.

Protected conversations and proforma compromises

Conversations between employers and employees are regarded as without prejudice where they relate to a possible exit arrangement but only where there is an existing dispute. The Government's intention is to extend these protected conversations where there is no such risk of a claim and the employer simply wants to have a frank conversation and then reach an agreement with the employee that it is time to go without this being relied on in evidence later. Compromises can take any number or shape or size but the Government is also looking at a proforma compromise for a simpler one size fits all regime.

Social media

This continues to rear its head in Tribunals and the press and it will do so during 2012 as more case law is developed on what is permissible activity by an employee inside and outside the business and what an employer can rely on when considering hiring a prospective employee.

Collective agreements after a TUPE transfer - are they static or dynamic?

At present they are regarded as static and any post transfer negotiations are not deemed to apply to the transferred employees, as the new employer is not a party to the negotiations. The Parkwood Leisure case has now been referred to the European Court of Justice, so a final decision on this point is expected.

Agency workers

There are no reported cases yet as it is early days. However subject to the qualifying period of 12 weeks, the likely issues will be determining comparators and equality of treatment.

Bribery Act

There has already been one conviction under the Act but many businesses are still grappling with how big a compliance issue this Act really is.

Holiday leave and sickness absence

The Government is proposing to amend the Working Time Regulations to deal with the discrepancies with the Working Time Directive. Concern remains over an employer's liability for carry over holiday leave when an employee is away on long term unpaid sick leave and for employees taking paid leave whilst on sick leave to ensure that these employees have at least 4 weeks' paid annual leave.


Unpaid volunteers are not covered by the discrimination legislation according to a recent Court of Appeal decision but an appeal is pending in the Supreme Court. If this decision is overturned businesses can expect to see a number of claims being made.


The TUC and the NUS are pressing for interns to be paid where they are doing more for employers than simply work shadowing. Young people need work experience but they should not be taken advantage of as they are in many instances. An intern who is expected to work would be entitled to the minimum wage and is probably an employee for all other relevant statutory rights.


The Supreme Court will shortly be delivering their judgment in the Seldon case and whether a law firm had a legitimate aim for using a retirement age of 65 to let Mr Seldon go or whether Mr Seldon was unlawfully discriminated against when he was retired involuntarily at 65. This may be an opportunity for the court to offer some general guidance on when it might be justifiable for employers to use a retirement age.

Associative discrimination and surrogacy

Mrs Coleman was found to have been directly discriminated against when she was dismissed for taking time off to look after her less abled child. Mr Kulikauska in turn appealed his unsuccessful claim for associated discrimination for supporting his pregnant wife which then led to his dismissal by MacDuff Shellfish. The Scottish Court of Session has now referred this to the ECJ. The position on associative pregnancy discrimination under the Equality Act 2010 is arguably unclear. The ECJ is also looking at the rights of a woman who becomes a mother by way of a surrogacy arrangement.

Human Rights

There are a quartet of religious discrimination cases before the European Court of Human Rights at the moment, the most familiar of which for HR advisers will be the Eweida case which concerned British Airways' refusal to let its employee wear a cross at work as it conflicted with their dress code. Does this type of discrimination "trump" all others? That would be unacceptable to many but there have to reasonable rules.


The Government is pursuing a programme of reform of immigration to the UK with the closures of routes and changes to settlement rules with effect from April 2012. There has been a big increase in the number of intra company transfers but settlement by such transferees in the UK is no longer available unless they entered the UK before April 2010. From 2016 those who apply for settlement from Tier 2 must be paid at least £35,000 per annum. There will also be a new visitor category for those on short-term assignments outside the Points-Based System.

And finally

Industrial Action

After several high profile strikes in 2011 many employers and the Government will be hoping that the Unions do not use the Golden Jubilee year or the Olympics as a platform for strike action. Sympathetic as people are to the Unions seeking to protect their members from being unduly affected by Governmental spending measures this is no time to derail the likely boost to UK competitiveness and visitor spending.

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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