News & Insights

Employment bulletin April 2014

April’s bulletin summarises the key changes coming into force this month, looks at whether a successful claimant can recover their ET fees and considers the risks of agreeing to review decisions.

Reminder: FSP Breakfast Briefing Tuesday 29 April 2014

Do you use zero hours contracts or casual workers?  Join us to discuss the key issues.  (Read more to book your place)

Spring clean for Employment Law

It’s a busy time of year for employment law.  As a reminder, the following changes take effect from 6 April 2014.

  • Early conciliation is introduced (see below).
  • The maximum compensatory award for unfair dismissal will increase from £74,200 to £76,574 (or a year’s pay if lower).
  • The limit on a week’s pay (used to calculate statutory redundancy payments and the basic award for unfair dismissal) will increase from £450 to £464.
  • Where an employee who is (or was eligible to be) a member of an occupational pension scheme transfers under TUPE and the new employer intends to satisfy their pension obligations by enrolling them in a money purchase or stakeholder scheme, the new employer will now have the option to match the old employer’s contributions or to match the employee’s contributions (up to a maximum of 6%).
  • Employment Tribunals will have new powers to impose financial penalties on employers who lose tribunal claims where there are ‘aggravating features’.  The Government suggested that negligence or malice would result in penalties but only time will tell what Tribunals consider to be ‘aggravating features’.  The penalty must be 50 per cent of the compensation awarded, up to a maximum of £5,000.  The penalty is reduced by half if paid within 21 days.  Many people question why the penalty is payable to the state not the employee, when it is the employee who has suffered the aggravated conduct.
  • Statutory sick pay increases from £86.70 to £87.55 per week.
  • Statutory maternity pay, ordinary and additional statutory paternity pay and statutory adoption pay increase from £136.78 to £138.18 per week.
  • Statutory discrimination questionnaires are abolished although ACAS has issued guidance on how ‘informal’ questions can be put to employers.  Tribunals will still be entitled to look at whether and how such questions have been answered when considering if discrimination has occurred.  It’s questionable therefore whether the abolishment of the questionnaires will have any real effect.
  • The obligation on employers to keep records of employees’ dates of sickness and SSP payments for 3 years from the end of the relevant tax year will be abolished.  However, employers will have good reason to maintain records of sickness periods and payments for several other purposes, such as ensuring consistency in treatment, managing sickness absence properly, reviewing productivity and preventing disability discrimination.
  • The maximum civil penalty for employers who employ adults who do not have the right to work in the UK will increase from £10,000 to £20,000 per employee.

In addition, employers should ensure that they are using the 2009 Health and Safety Law posters (not the 1999 poster) by 5 April (further details are on the HSE website).

As discussed at our January breakfast briefing, later on this Spring there will be further changes.

  • Employee liability information will have to be provided 28 days (rather than 14 days) before a TUPE transfer (for transfers taking place on or after 1 May 2014).
  • The right to request flexible working will be extended to all employees with 26 weeks’ service (not just parents and carers as is currently the case) from 30 June 2014.  The rigid statutory procedure will no longer apply.  Employers will have to consider all requests reasonably and notify employees of their decision within three months (unless an extension is agreed).  ACAS has published a draft Code of Practice and accompanying non-statutory guidance to assist employers in dealing with flexible working requests under the new system.

Early Conciliation

Louise Smyth explains how the new Early Conciliation scheme will work in practice. Read more.

Can a successful claimant recover their ET fees?

There was considerable publicity when fees for bringing tribunal claims were introduced last July and they remain controversial.  While some employees may benefit from remission of fees, most people bringing a claim in an ET now pay a fee of up to £250 to issue a claim and a further fee of up to £950 if the claim proceeds to a hearing (the level of fees depends on the type of claim brought).  Are those fees recoverable if the employee wins? 

The basic position under the Tribunal Rules is that the Tribunal has discretion to order the employer to pay the employee’s fees but only if the claim is successful.  HM Courts and Tribunal Services’ guidance on fees in the ET goes further and says that the general position is that, if an employee is successful, the employer will be ordered to reimburse the fees.  The Tribunal Rules may be amended to bring them in line with the guidance. 

The Employment Appeal Tribunal (EAT) followed this approach in a recent case relating to EAT fees.  The employer was ordered to pay the employee’s fees as it had the means to pay and had substantially lost.  This was despite the fact that the employee had conducted the case himself in an unhelpful and unco-operative manner.  The order was subject to the employee’s application for remission being refused.

Therefore, employers should assume that if they are unsuccessful in their defence of tribunal claims they are likely to be ordered to pay the employee’s fees as well as any compensation.  Doubtless this approach will mean that employees will seek to recover fees as part of any settlement negotiations.

National Minimum Wage Increase

On 1 October 2014, the National Minimum Wage will increase:

  • from £6.31 an hour to £6.50 an hour for adults;
  • from £5.03 an hour to £5.13 an hour for 18-20 year olds;
  • from £3.72 an hour to £3.79 an hour for 16-17 year olds; and
  • from £2.68 an hour to £2.73 an hour for apprentices.

Reasonable adjustments – is the clock still running?

Under the Equality Act 2010, an employer has a duty to make reasonable adjustments where it imposes a provision, criterion or practice which puts a disabled employee at a substantial disadvantage when compared with non-disabled employees.  Failure to make a reasonable adjustment is discrimination.  An employee who has suffered discrimination can bring a tribunal claim but has to do so within three months of the discriminatory act or within 3 months of the end of conduct which extends over a period of time (which is commonly referred to as “a continuing act”). 

In a recent case, the EAT considered Ms Jamil’s situation.  She was a Job Centre Plus worker with rheumatoid arthritis which made her frequently late for work after an 80 minute journey to Ealing.  She repeatedly asked to be transferred to Uxbridge, nearer her home.  Her employer ignored her initial requests and finally refused to transfer her on the basis that there was no vacancy but stated it would continue to review the situation.  More than three months after the refusal, Ms Jamil brought a claim for failure to make a reasonable adjustment.  Her employer argued that her claim was out of time.

The EAT found that the duty to make reasonable adjustments was a continuing duty that applied on each day of Ms Jamil’s employment.  The fact that the employer had agreed to review the position meant that there was no end date from which the 3 months period should run.  Rather, there was a continuing act which meant that the claim was in time.

The decision sits uneasily with the leading Court of Appeal judgment in this area, which found that a failure to make reasonable adjustments is an omission triggering the start of the three month time limit, and not a continuing act.  However, it is arguable that the Court of Appeal judgment can be distinguished on the grounds that Ms Jamil’s employer had specifically committed to keeping its decision under review.

This case might encourage employers not to agree to review a refusal to implement a requested adjustment.  However, care needs to be taken in each case.  While that may mean that an employer has certainty as to when a time limit will expire, it may make the actual decision unreasonable in the first place.