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April 2013 Updates

A new guide to collective redundancy consultation

Acas has published a new guide on collective redundancies to reflect the changes which came into force on 6 April 2013. The changes (set out in our March 2013 updates) reduce the consultation period from 90 to 45 days for redundancies involving 20 employees or more. The key points of Acas's new guide are summarised below:

  • The guide is primarily aimed at employers.
  • It explains the legal framework and best practice requirements for a collective redundancy consultation exercise.
  • It provides clarification and guidance on the meaning of "an establishment".
  • It provides guidance on when it is appropriate for an employer to exclude a fixed-term employee from a collective redundancy consultation exercise.

Blowing the whistle on disclosure in the workplace

The Whistleblowing Commission has launched a public consultation on whistleblowing in the workplace. Whistleblowing occurs when a worker reports suspected wrongdoing at work. It is often referred to as "making a disclosure in the public interest". The Commission is interested in looking at:

  • Individual, organisational and wider society attitudes towards whistleblowing.
  • Whether the current law and associated policies are adequate and effective.
  • Whether regulators should be doing more.
  • How whistleblowing can be incentivised.
  • Whether Tribunals are protecting whistleblowers (and society at large).

The consultation document makes proposals to offer increased protection for those who blow the whistle. The proposals include:

  • Making whistblowing policies mandatory.
  • Introducing rewards.
  • Extending protection to a wider category of workers.
  • An exemption from tribunal fees for whistleblowing claims.

The consultation is open for 12 weeks and will end on 21 June 2013. The consultation document can be found at http://www.pcaw.org.uk/whistleblowing-commission-public-consultation.

EAT reluctant to spare employers' feelings

In the recent case of HM Land Registry v McGlue, the Employment Appeal Tribunal ("EAT") discussed how Tribunals should approach injury to feelings and aggravated damages in discrimination cases.

Mrs McGlue was on a career break following maternity leave, from which she could return at any time. She applied to take a voluntary leaving package pursuant to a voluntary severance scheme that her employer had set up. Her employer then unilaterally decided to exclude all those on a career break from it without publishing the information or consulting with employees or trade unions in this regard. Mrs McGlue was misled into thinking that she was still eligible for participation in the scheme.

Mrs McGlue won her claim for indirect sex discrimination at the Employment Tribunal. She was awarded an injury to feelings award of £12,000 and an aggravated damages award of a further £5,000. Aggravated damages are awarded to provide compensation for the mental distress caused by the manner or motive with which a wrong was committed and/or the defendant's subsequent conduct.

Mrs McGlue's employer appealed on the basis that, amongst other things, the award for injury to feelings was too high.

Awards for injury to feelings are governed by the "Vento Guidelines" as follows:

  • Lower band: an award of up to £6,000 for less serious cases such as an isolated incident of discrimination.
  • Middle band: between £6,000 and £18,000 for serious cases, which do not merit an award in the highest band.
  • Top band: between £18,000 and £30,000 for the most serious cases, where there has been a lengthy campaign of discriminatory harassment.

The EAT concluded that Mrs McGlue's award was correct because it fell within the middle band. It also stated that awards in respect of injury to feelings were not susceptible to "close calculation" and that they would not, therefore, be interfered with unless the award was "wrong in principle" or "manifestly excessive." The EAT did, however, feel that the aggravated award of £5,000 was not appropriate in the circumstances.

Employee shareholder status: third time lucky

Following a great deal of twists and turns, the House of Lords has voted to introduce the employee shareholder status regime. This comes after the House of Lords rejected the idea twice.

The regime has been amended slightly, so that an employee shareholder agreement will be invalid unless the individual has been advised by an independent adviser (such as a lawyer, CAB, law centre, union etc) prior to entering into the contract. The employer will have to pay for the (reasonable) cost of the advice regardless of whether or not the employee accepts the role.

This is in addition to earlier concessions, such as:

  • The seven day "cooling off period" during which any acceptance of employee shareholder status will not be binding.
  • Employers needing to provide employees with a written statement containing full details about the shares and the rights they carry.
  • Any jobseeker who refuses an offer with employee shareholder status not forfeiting their social security benefits.
  • The first £2,000 of shares being free from income tax.
  • Existing workers being protected if they refuse to switch to an employee shareholder contract.

If you require any further advice on the changes and how they will affect you please do not hesitate to contact us. Given the turbulent passage of the bill it is very much a case of "watching this space" for further developments.

New national minimum wage rates

The Government has accepted the Low Pay Commission's ("LPC") recommendations for this year's national minimum wage rates. It has also decided that the apprentice wage should be increased (and not frozen as the LPC had recommended).

This means that, from 1 October 2013, the national minimum wages rates will be as follows:

  • The adult rate (i.e. 21 and over) will increase from £6.19 to £6.31 per hour (an increase of 12 pence).
  • The rate for 18 to 20 year olds will increase from £4.98 to £5.03 per hour (an increase of 5 pence).
  • The rate for 16 to 17 year olds will increase from £3.68 to £3.72 per hour (an increase of 4 pence).
  • The apprentice rate will increase from £2.65 to £2.68 per hour (an increase of 3 pence).
  • The accommodation offset (which applies if an employer provides accommodation for its employees) will increase from £4.82 to £4.91 (an increase of 9 pence).

TUPE: to consult or not to consult?

The recent case of I Lab Facilities v Metcalfe and others has delivered an interesting decision relating to the Transfer of Undertakings (Protection of Employees) Regulations 2006 ("TUPE").

Regulation 13 of TUPE states that employers must inform and consult with "affected employees" prior to a TUPE transfer taking place. In the above case, the EAT decided that, if only part of a business is subject to a transfer, the obligation to inform and consult does not extend to employees working within the part of the business which does not transfer.

The EAT also decided that the obligation does not engage where a potential transfer is envisaged, which never materialises.

This is an interesting decision, which is sure to affect the way in which future TUPE transfers are dealt with.

Employment Tribunal fees

From the summer of 2013, those bringing a claim in the Employment Tribunal will be required to pay an issue fee to commence their claim, as well as a hearing fee if the claim progresses to a full Tribunal hearing. The level of fee to be paid will depend upon the nature of the claim. For relatively straightforward, low value claims, such as payment of wages, redundancy pay, holiday pay and notice pay, level one will apply. For claims such as dismissal, discrimination, equal pay and whistleblowing, level two will apply. If the claim falls between level one and level two, you will be expected to pay the higher fee.

Level one

Fee type One Claimant Two to ten Claimants 11 to 200 Claimants 201 or more Claimants
Issue fee £160 £320 £640 £960
Hearing fee £230 £460 £920 £1,380

Level two

Fee type One Claimant Two to ten Claimants 11 to 200 Claimants 201 or more Claimants
Issue fee £250 £500 £1,000 £1,500
Hearing fee £950 £1,900 £3,800 £5,700

In the Employment Appeal Tribunal, there will be a fee of £400 to issue an appeal and a fee of £1,200 to proceed to a full hearing.

Counting pennies: bankers' bonuses capped

The European Parliament has voted to cap bankers' bonuses so that the salary to bonus ration will be 1:1. This is in order to "curb speculative risk-taking". However, it will be possible to raise the bonus ratio up to a maximum of twice the bankers' annual salary if such a decision is approved by at least 66% of the shareholders owning half the shares represented. If there is no quorum, the minimum will be 75% of votes.

Furthermore, 25% of any bonus award exceeding 100% of salary will need to be deferred for at least five years in the hope that it will encourage bankers to take a long term view of their employment and their remuneration.

If the above is approved by the Council of Ministers, the new rules will apply from January 2014.

Email: info@stewartlaw.co.uk


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