EMPLOYMENT NEWS – Employment Law Update 2011

2011 will be another year of significant change in employment law. Set out below are the key statutory changes as well as important guidance to look out for.

CHANGES IN FEBRUARY 2011

Tribunal Awards to Increase

From 1 February 2011:

Unfair Dismissal – maximum compensatory award for unfair dismissal will rise from £65,300 to £68,400.

Statutory Redundancy Payments – maximum amount of a week’s pay, used to calculate statutory redundancy pay (among other things), will rise from £380 to £400.

CHANGES IN APRIL 2011

Statutory Payment Rates to Increase

From 11 April 2011:

Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay will increase from £124.88 to £128.73. The weekly earnings threshold for these payments will rise from £97 to £102.

Statutory Sick Pay will increase from £79.15 to £81.60, with the weekly earnings threshold also rising from £97 to £102.

Maternity allowance will increase from £124.88 to £128.73, with the earnings threshold remaining at £30.

Bribery Act 2010

The Bribery Act 2010 is due to come into force in April 2011. The Act repeals the common law position on bribery and introduces offences for; bribing another person, being bribed and bribing a foreign official. A commercial organisation will also commit an offence for failing to prevent bribery committed by someone associated with that organisation.

The Act provides a defence for commercial organisations if they can show that they had ‘adequate procedures’ in place to prevent such conduct. The Government is currently consulting on the meaning of ‘adequate procedures’ and should publish this guidance before the Act comes into force. Companies are currently risk assessing their liability and putting in place appropriate policies, amending relevant documents used and arranging training both for Boards of Directors and staff.

Disability Guidance

The Office of Disability Issues produced updated draft guidance on the meaning of disability in August 2010 in light of the fact that the definition of a disabled person in the Equality Act is slightly different to that used in the Disability Discrimination Act 1995. Consultation on these guidelines closed on 31 October 2010 and we currently wait for the outcome of the revised Guidance.

The draft Guidance, subject to consultation, takes into account and incorporates changes introduced by the Equality Act 2010 and recent case law developments. It is hoped that the revised Guidance will come into force by April 2011.

Immigration

In November last year the Government announced their intention to cap the number of non EU migrants in Tiers 1 and 2 entering the UK and provided that the following rules will come into effect in April 2011:

Tier 1 – The Tier 1 (general) category will be abolished and replaced with a new Tier 1 (exceptional talent) category. This category will be limited to 1,000 “people of exceptional talent-the scientists, academics and artists who have achieved international recognition, or are likely to do so”. The Tier 1 (investor) and Tier 1 (entrepreneur) categories will not be subject to the cap.

Tier 2 – The new rules provide an annual limit of 20,700 skilled non-European workers that businesses can bring into the country under Tier 2 (general) of the points-based system. There is also a requirement for occupations in this category to be at graduate level. The cap will not apply to those earning more than £150,000 a year.

Intra-company transfer route – there is now a requirement for those coming to the UK for more that 12 months to earn at least £40,000 and limiting their total stay in the UK to five years. This rule will sit outside the annual limit.

Additional Paternity Leave and Pay Regulations

Currently fathers are entitled to take one or two consecutive weeks’ paternity leave, paid at the statutory rate of £124.88 per week. Regarding additional paternity leave, the Government confirmed in September 2010 that the Regulations will remain in force “as an interim measure” in order to further their plans to extend flexible working. As such the Regulations will apply to parents of babies born on or after 3 April 2011 as planned.

CHANGES IN JUNE 2011

European Works Councils (EWC) are currently regulated by the Transnational Information and Consultation of Employee Regulations 1999 (“TICE Regulations”). However on 5 June 2011 the TICE Amendment Regulations 2010 will come into force. These Regulations aim to streamline the procedure contained in the 1999 Regulations and place more prescriptive requirements on central management about how consultation should take place.

CHANGES IN OCTOBER 2011

End of the Default Retirement Age

Government consultation on the removal of the default retirement age closed on 21 October 2010 and we are currently waiting for comments on the proposals. The Government is proposing to abolish the default retirement age of 65 on 1 October 2011 and transitional arrangements will be in place from 6 April 2011. These arrangements provide that after this date employers will no longer be able to rely on the default retirement age and use the duty to consider procedure. Retirement will therefore no longer be a fair reason to dismiss.

Agency Workers Regulations 2010

The Government confirmed on 19 October 2010 that the Agency Workers Regulations 2010 will not be amended before they come into force on October 2011. A summary of the implications of the Agency Workers Regulations 2010 can be found in our March 2010 newsletter by clicking here.

LEGISLATION ON HOLD OR UNDER REVIEW

Extension of Flexible Working

At present parents with children under 17 or who have a disabled child under 18 have the right to make a request for flexible working. The Government has announced that they intend to extend this right to parents with children under 18 from April 2011. Consultation on how this right will be extended is expected to be launched in the near future.

Qualifying Period for Unfair Dismissal

The Government is currently considering whether to increase the qualifying period for unfair dismissal claims from one to two years.

Right to Request Time Off For Training

From 6 April 2010 employees of businesses with more than 250 employees were provided with the right to request time off work to undertake study or training. It was intended that this right should apply to all employees from 6 April 2011. This matter is still under review and businesses should therefore assume that the right will be extended to all employees until Government announcements state otherwise.

Equality Act 2010

The majority of the provisions of the Equality Act 2010 came into force on 1 October 2010. This Act has brought together and repealed discrimination legislation with the aim of harmonising and improving equality law.

The Equality and Human Rights Committee (EHRC) has created a Code of Practice on Employment and a Code of Practice on Equal Pay which will be brought into effect imminently. This guidance can be found at: http://www.equalityhumanrights.com/legal-and-policy/equality-act/equality-act-codes-of-practice/

The Government also confirmed on 2 December 2010 that the positive action in recruitment and promotion provisions will come into force in April 2011.

Provisions relating to combined discrimination (dual discrimination) which allow direct discrimination claims to be brought in relation to a combination of two of the ‘protected characteristics’ are due to come into force in April 2011. However, this has not been confirmed by the current Government and it is interesting to note that the EHRC’s new Code does not mention combined discrimination at all.

OTHER DEVELOPMENTS

The caselaw continues to develop in particular areas such as whistleblowing, the extra territorial jurisdictional reach of UK employment rights, equal pay and TUPE, particularly in insolvency situations. Looking forward it appears the trend of increased litigation from employees will continue as will the influence of Europe. Vince Cable has recently stated that there will be an end to ‘gold plating’ and instead the wording of European Directives will be applied more directly into UK law.

If you have any specific queries relating to the content of this article or would like additional information on the issues covered please contact Ranjit Dhindsa.