News & Insights

Employment bulletin January 2013

Every month the employment group considers the latest employment issues that affect both employers and employees.

New Year, new rules!

Key changes to look out for in 2013

  • February – redundancy payments and unfair dismissal compensation to increase (see below).
  • March – increased parental leave (see below).  Employers’ responsibility for harassment of their employees by someone else (eg a customer) to be removed.  Discrimination questionnaires to be abolished.
  • April – Redundancy consultation periods to be reduced (see below).  Whistle-blowing protection will no longer apply to a complaint about breach of the employee’s own contract of employment.  “Employee ownership” status to be introduced (see our December bulletin for details).  Further changes to parental leave and flexible working entitlements (see below).
  • Summer – fees to bring tribunal claims to be introduced.

Other changes are expected but as yet timing is uncertain.

Consultation period for large-scale redundancies to halve

There has been much publicity about the reduction in the consultation period.

Just before Christmas, the Government announced that it plans to reduce the consultation period for large-scale redundancies (ie those involving 100 or more employees) from 90 to 45 days from April.  The Government considers that this will “strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure”. This will considerably reduce employers’ costs as they will be able to give dismissal letters to employees 45 days earlier.

Employers, particularly in the education sector, are likely to welcome the news that collective redundancy consultation obligations will no longer apply to the expiry of fixed term contracts from April 2013.

ACAS is due to issue new guidance on good quality consultation in time for these changes.

Limits to increase

The limits on redundancy payments and unfair dismissal compensation are to increase.

On 1 February:

  • the maximum compensatory award for unfair dismissal will increase from £72,300 to £74,200; and
  • the maximum amount of a week’s pay used to calculate statutory redundancy pay will rise from £430 to £450; and

The new figures will apply to dismissals which take effect on or after 1 February.  The current figures will apply to dismissals that take place before 1 February 2013, regardless of when compensation is awarded.

Separately, new rates for statutory payments have been announced. They will apply from 7 April 2013 (except SSP which will increase the previous day).

  • Statutory maternity pay, ordinary and additional paternity pay (OSPP and ASPP) and statutory adoption pay (SAP) will all increase to £136.78 per week.
  • Statutory sick pay (SSP) will increase to £86.70 per week.

Family-friendly rights

Will the new flexible parental system be good for businesses and families?

In our November 2012 e-bulletin we mentioned press reports about the Government introducing a new flexible parental leave system to replace the current rules.

For the confirmed details read our flexible parental leave and flexible working article.

Two strikes and you’re out?

Can a tribunal consider the fairness of previous warnings when establishing if a dismissal is fair?

An employee may be fairly dismissed for misconduct due to a culmination of warnings. A recent case has considered whether in such situations the tribunal is permitted to consider the fairness of the previous warning(s) when deciding if the dismissal was fair.  Of course, you wouldn’t expect a simple answer; the best summary is “Generally, no, but …”.

The Tribunal may only consider whether the previous warning was manifestly inappropriate or issued in bad faith.  If neither scenario applies the Tribunal should consider the previous warning as valid and should not “go behind” the initial warning to consider if a lesser penalty should have been applied for the initial incidence of misconduct.

The Tribunal should be looking at the reasonableness of the employer’s actions in dismissing and so should therefore take into account that there was already a warning in place.  However, the Tribunal is entitled to consider whether the initial warning is being challenged, eg by an appeal, at the point of dismissal.  The Tribunal is also allowed to take into account the factual circumstances giving rise to previous warning and the dismissal – a degree of similarity in the circumstances will tend to justify a more severe penalty while dissimilar scenarios may suggest that a further warning rather than dismissal would have been the appropriate sanction for the subsequent misconduct.  The Tribunal may also consider how the particular employer has punished other employees who have committed similar examples of misconduct.  Employers will be pleased to hear that the EAT confirmed that a final written warning always implies that any further misconduct of any kind is likely to result in dismissal and it will be the exception to the rule for this not to apply.

Clearly, employers should ensure that warnings are appropriately issued and in the case of misconduct it is made clear in all warnings that any further misconduct of any nature will result in the next level of warning/dismissal being imposed.

Real time information

This year employers will be required to use the Real Time Information (RTI) submission process to notify HMRC about PAYE and National Insurance payments “on or before” they are made.  This means that the information will need to be submitted to HMRC as part of the payroll process throughout the year, rather than at the end of the year.  Most employers will have to use RTI from April and all employers should be ready by then; although the requirement will not apply to some employers until October.

One vital preparatory step is to ensure that all the information you hold about employees is up to date and accurate eg full names, dates of birth and NI numbers.  You also need to ensure that your payroll software can process and submit RTI data.

Penalties will be imposed for late or inaccurate RTI submissions although there will be some initial leeway.  HMRC have confirmed that penalties will not be applied for late filings during tax years 2012-2013 and 2013-2014 provided all information is submitted by 19 May following the end of the relevant tax year.  During 2013-2014 penalties may be imposed for inaccurate RTI submissions so accuracy really is the key.


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