Employment expert Kate Boguslawska talks employment law changes
The Easter Bunny isn't the only thing to watch out for this April, as on the 6th employers will have to be aware of a raft of employment law changes.
In addition to the regular increases to the compensation limits, we also witness the launch of the ACAS Early Conciliation Service, the abolition of the discrimination questionnaires and the introduction of financial penalties for employers who lose an Employment Tribunal case.
New compensation limits
The new compensation limits which apply from 6 April 2014 are as follows:
- The limit on a week's pay for statutory redundancy pay and the basic award in unfair dismissal cases is increased from lb450 to lb464
- The maximum compensatory award for unfair dismissal claims is lb76,574 (or a cap of 52 weeks' pay whichever is the lower)
- The current Statutory Maternity, Paternity and Adoption Pay rates are lb138.18 (with a new Lower Earnings Limit of lb111)
- Statutory Sick Pay rises to lb87.55 per week
Although these are not drastic increases it is important that employers are up to date on the risks of falling foul of the UK's complex employment legislation.
ACAS Early Conciliation Service
The ACAS Early Conciliation Service is available to employers and employees from 6 April 2014 - and it becomes mandatory for litigants from 6 May 2014.
The aim is to include a period of conciliation before a claim is allowed to enter the Employment Tribunal system, thereby limiting the costs, time and stress of an Employment Tribunal.
A person wanting to bring an employment tribunal claim, instead of lodging the claim would have to contact ACAS, where for a month, with help from a conciliator officer, the parties would explore settlement opportunities. When this is not successful, or either party refuses, after a month ACAS will issue the Claimant with the certificate allowing them to present their claim to the employment tribunal.
Early Conciliation aims at resolving the majority of workplace disputes including:
- unfair dismissal claims
- workplace discrimination
- redundancy payments or disputes around selection procedures
- deductions from wages or unpaid notice/holiday pay
- rights to time off or flexible working
- equal pay
Although the scheme is an admirable attempt to encourage early settlement, there are fears that it may not be helpful to employers who may be encouraged to settle a claim without proper consideration by an Employment Tribunal. Commentators are speculating that this will encourage vexatious and frivolous claimants proceeding on the off-chance that they will be successful without incurring the cost and stress of an Employment Tribunal.
Financial penalties imposed on employers who lose the Employment Tribunal case
Employment Tribunals now have the power to impose a financial penalty of up to lb5,000 on an employer found to have breached a worker's rights, if there were "aggravating features". Although the aggravating features are not defined, before making such an order the Tribunal will need to consider:
- The facts of the case
- The size and resources of the employer
- How serious was the breach and how quickly rectified
- How the parties behaved
If imposed, the penalty must be 50% of any award to the worker (subject to the cap), but can be imposed even if no award is made. The penalty will not be paid to the Claimant but to the government.
Although prompt payment within 21 days will reduce the penalty by 50%, an unsuccessful employer will potentially end up with a hefty bill also including the claimant's monetary compensation, reimbursement of the claimants' fees and the financial penalty.
Although tribunal proceedings have never been a cheap, there has never been more incentive for an employer to put its house in order, to review its contracts and policies and to introduce relevant procedures. All these steps if not preventing, will minimise the risk of a complaint from a disgruntled employee.
As part of our services for employers, we offer pragmatic advice on how to run your business in a way that minimises employee headaches. In our experience, these often occur without warning but the business could usually have done something differently to reduce the impact. Our Employer Protection Insurance Scheme is unique - and designed to provide a real value-added service to employers. Acting as an on-call HR team, we can take care of most HR matters, leaving you to focus on your business, safe in the knowledge that you are insured in the event an employment tribunal rears its head.
Our dedicated employment team is headed by Kate Boguslawska. Always happy for a no-obligation discussion, Kate can be contacted on 0207 632 4300.