News & events

03/02/2012 - Employment News update

DWP announces further delay to pension reforms
At the end of November 2011, the Government pushed back the date for small businesses (fewer than 50 employees) to start complying with the auto-enrolment scheme to 1 May 2015. This has since been delayed by a further month and these small businesses will be given auto-enrol dates between 1 June 2015 and 1 April 2017.

Medium sized businesses (50 to 249 employees) have now been reallocated with new staging dates between 1 April 2014 and 1 April 2015. For some businesses, this pushes the date back by up to a further nine months.

The latest delays do not affect large businesses (250 or more employees). The auto-enrolment stages for these large businesses remains between 1 October 2012 and 1 February 2014. This stage is expected to take up to 10 million people into pension saving.

Dates have also been pushed back for new employers setting up businesses. Businesses set up between 1 April 2012 and 30 September 2017 will now have an auto-enrolment window of 1 May 2017 to 1 February 2018.

The delay in auto-enrolment has also delayed the increase in minimum employer contributions from 1% to 2% by a year, revising this date to 1 October 2017. This is then due to increase to 3% from 1 October 2018.

New year, new Tribunal reforms?
There has recently been a large amount of discussion in the press regarding changes to employment law and the anticipated upheaval of the Tribunal system and there are still many anticipated changes expected to be announced later this year.

Increase in qualifying period for unfair dismissal claims
The first (and perhaps most controversial) reform expected is the extension of the qualifying period for unfair dismissal claims from one to two years.

Although this may increase the hiring of staff, it may also increase the firing, as there will be little recourse for employees with less than two years unless they can bring themselves within the exceptions where no qualifying service is required. Tribunals may find themselves facing a number of claims that have been ‘squeezed' into these areas, to allow an employee without the requisite service to attempt to make a claim for unfair dismissal.

This change is to be implemented for any employees starting in employment from 6 April 2012. Therefore the former one year qualifying period will apply to all those currently employed and although it is best practice for employers to follow a fair process when dismissing any member of staff the applicable qualifying period is something which employers should bear in mind.

Fees, penalties, costs and deposit orders
Consultation is underway regarding a proposed introduction of a fee scheme to the Tribunal system. Under the current system no fees are payable and unlike the civil system, costs awards are rarely made. The Government estimates that in the financial year 2010/2011 the cost to the tax payer of the Tribunal system was around £84m.

The consultation paper sets out two different options for the introduction of a fee scheme, one involves the claimant paying both an issue and hearing fee and another that involves only one fee being payable, but with a significant increase in fees for any claims above £30,000.

In addition to the fees set out above, the Government is also intending to introduce a discretionary power for Tribunals to impose a financial penalty on employers where they are found to have breached employment rights. These penalties will be payable in addition to any other award made. The proposals detail a minimum threshold of £100 up to a maximum of £5000, with the amount payable by the employer based on the Tribunal award itself. However, a reduction of 50% will be available where payment is made by the employer within 21 days.

The Government is also proposing to double the deposit order limit from £500 to £1000 and to double the limit of costs orders from £10,000 to £20,000.

Changes to mediation
The introduction of ‘compulsory mediation' via ACAS prior to the issue of a claim to the Tribunal is also proposed. The plans suggest a process whereby any claim will be initially lodged with ACAS and a one month period of conciliation will be undertaken to try to resolve matters. Only when this process has been unsuccessful will claimants be able to proceed to lodge a claim. The hope is to weed out any vexatious claims to settle others at an early stage. However, there are some concerns that too much pressure will be placed on ACAS, which is an already overstretched service.

Time off for the Olympics
With 6.6 million spectators and 70,000 volunteers it is inevitable that the Olympics will have an impact on your business operations. Now is the time to establish a clear policy and talk with your staff so you can manage attendance and performance during the Games. There is no right to paid or unpaid time off to take part as a spectator or volunteer, unless the employee is taking authorised annual leave, but employers may see an increase in "sick” days unless they are proactive and develop a fair policy for all.

New compensation limits
From 1 February 2012, the new standard limits are:

• Unfair dismissal compensatory award:£72,300
• Unfair dismissal basic award:£12,900
• Maximum weekly pay for redundancy/ basic award:£430
  

Authored by:

Catharine Geddes (show profile)

Published by:

Allison Grant (show profile)

Article type:

News (show all News)