January 14, 2013

There’s no escaping from the fact that January is an unremittingly dismal month: it’s usually cold, often wet and it’s invariably dark by mid-afternoon.   It’s also the time of year when it seems to be compulsory for lawyers to offer predictions about what’s going to happen over the next 12 months.  We realise that this rarely makes things any better.  Nevertheless, it would be remiss of us not to point out that we can expect quite a few employment law developments in 2013. The good news is that many of the changes are designed to reduce the number of tribunal claims.  The not so good news is that many people think that a lot of them are unlikely to work and may instead simply add to the cost of litigation.   We’ll spare you the full list of possible changes.  Instead, here’s a selection of the highlights. Employment Tribunal Fees For the first time in their history, Employment Tribunals will start charging fees from this summer.  The precise amount will depend on the type of claim.  Anyone wishing to bring an unfair dismissal or discrimination claim will have to pay a total of £1,200 to take the case to a full hearing (£250 in order to issue the claim and then a further £950 prior to the hearing).   More straightforward and lower value claims, such as for unpaid wages, will attract a total fee of £390 (an issue fee of £160 and a hearing fee of £230). Whether this will have the desired effect of encouraging parties to negotiate rather than litigate remains to be seen: it may just encourage employers to hold back from making settlement offers in the hope that the prospect of paying a fee will deter the individual from bringing a claim. Read more Financial penalties for employers As a counterbalance to the introduction of fees for claimants, tribunals will be given the power to punish employers who lose an employment tribunal case by imposing a financial penalty of up to £5,000 if the tribunal decides that their breach has “aggravating features”. Unfair dismissal compensation On 1 February 2013 the upper limit on the unfair dismissal compensatory award will increase to £74,200.  Although no plans have been announced to change this limit, legislation is being introduced which will give the Government the power to reduce the limit and/or to vary it depending on the size of the employer. Compulsory ACAS Conciliation In an effort to reduce the number of Tribunal claims, it is expected that the Government will introduce its plans to require prospective claimants to submit details of their dispute to ACAS first, at which point they will be offered pre-claim conciliation for a period of one month. Read more Pre-termination negotiations Although the Government has confirmed that it has shelved its plan to introduce the concept of “protected conversations”, it will be going ahead with legislation to make pre-termination settlement negotiations inadmissible in subsequent unfair dismissal claims.  The general idea is to “give businesses the confidence to talk to their employees about bringing the relationship to a swift end.”  Whether this materialises remains to be seen.  However, in view of the way in which the legislation is drafted, we suspect that it will be a recipe for more rather than less litigation. Settlement Agreements In a move that will no doubt please the Plain English Campaign, “compromise agreements” will be renamed “settlement agreements” later in the year.  This is likely to be the first of a range of measures designed to make it easier for employers and employees settle potential claims.  At some point in the not too distant future, it is likely that we will see the introduction of a model settlement agreement and optional model letters for employers to use in a variety of situations to propose settlement terms. Read more Increase in unpaid parental leave Employers may need to update their policy documents to reflect the fact that, from March 2013, the amount of unpaid parental leave that working parents can take will increase from 13 to 18 weeks per child.  The maximum amount of parental leave that may be taken each year will remain at 4 weeks. Further extensions to flexible working and parental leave rights are due to be introduced in 2014 and 2015. Read more Running payroll in “real time” PAYE will receive a major shakeup from April 2013 when Real Time Information will be introduced.  This will require employers to report PAYE deductions to HMRC every time an employee is paid rather than just at the end of the tax year.  Penalties will be phased in for employers who fail to comply with the new requirements. Read more If you would like further details please contact Marcus Rowland (0207 927 9677) or Seth Roe (01242 631262)