Employment law outlook for 2013
Employers are preparing for a raft of employment law changes in 2013. Read our guide to what to look out for this year – and beyond.
• New, increased limits on compensation for unfair dismissal, redundancy and other employment law events introduced, effective where the redundancy, dismissal or other event giving rise to compensation occurs on or after 1st February. The main changes to the limits are:
o an increase in the amount of a 'week's pay' (for the purposes of calculating statutory redundancy pay and the basic award for unfair dismissal) from £430 to £450;
o an increase in the compensatory award for unfair dismissal from £72,300 to £74,200.
• Unpaid leave for parents increases from 13 to 18 weeks. No date has yet been fixed for this change but it is supposed to be in force before 8 March.
• The minimum consultation period where 100 or more redundancies are proposed reduced from 90 days to 45 days. The collective redundancy obligations generally no longer apply to employees on fixed-term contracts which have reached their agreed termination point. A non-statutory Acas code of practice is to be published, covering key collective redundancy issues such as the definition of 'establishment'. These changes are likely to be introduced on 6 April.
• Protection for whistleblowers reduced, by requiring them to satisfy a public interest test before claims can proceed.
• Employment Tribunal fees introduced, such as issue and hearing fees. Tribunals given power to order losers to pay winners' fees (with a remission system for losers who cannot pay).
Other prospective changes for 2013 and beyond
• Repeal of requirement for discrimination questionnaires.
• Repeal of employers' liability for harassment of employees by third parties.
• Tribunal given power to require employers to carry out pay audits if there is breach of equal pay or sex discrimination laws.
• Evidence of 'quiet word' discussions with employees, with the aim of negotiating terms for ending employment, no longer admissible in unfair dismissal claims unless there has been 'improper behaviour'. An Acas statutory code will explain the 'improper behaviour' test in more detail.
• Compulsory Acas conciliation required before Tribunal claims can proceed.
• Power to impose additional penalties of up to £5,000 on employers in claims with aggravating features.
• Power to cap unfair dismissal awards at 12 months' pay.
• Introduction of 'employee shareholders', who give up certain employment rights (including the right to claim unfair dismissal, and statutory redundancy pay) in return for shares (and tax breaks) in their employer's company.
Employers should consider the effect of the new rules on their policies and procedures, and whether to permit ownership of shares by 'employee shareholders'.
Jonathan Waters is the founder of Helix Law. Before qualifying as a Solicitor he worked in industry and in investment banking for over a decade. He was also the Partner in charge of Commercial Litigation, Employment Law and Property Litigation at Stephen Rimmer LLP. Jonathan has wide experience of helping and advising businesses to avoid or to deal with commercial disputes and in particular construction disputes.
This article is written to raise awareness of the issues it discusses and it may not be updated after it is first written, even if the law changes. It is not intended to be legal advice and cannot be relied on as such. Helix Law is not responsible or liable for any action taken or not taken as a result of this article. If you think the matters set out affect you and you wish to apply them to your particular circumstances then we are happy to give you free initial telephone advice.