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January 2012 Updates

Key employment law changes in 2012

Here are some key dates and changes to be aware of in 2012:

31 January 2012

  • This is the closure date for initial comments to be made on the effectiveness of TUPE and the scope of the collective redundancy rules. This may result in a formal consultation process commencing later in the year.

1 February 2012

  • Tribunal award limits will come into force as follows:
    • The maximum amount of a week's pay, which is used to calculate a statutory redundancy payment and the basic award for unfair dismissal, increases from £400 to £430.
    • The maximum unfair dismissal compensatory award increases from £68,400 to £72,300.
    • The limit on the daily amount of a guarantee payment payable to an employee will increase from £22.20 to £23.50

6 March 2012

  • Consultation will close on the possible introduction of fees in Employment Tribunals and the Employment Appeal Tribunal.

April 2012

From 1 April:

  • The standard rate of maternity, paternity and adoption pay will increase from £128.73 to £135.45 per week.
  • The working time rules will be amended to expressly allow for holiday to be carried forward in limited circumstances.

6 April 2012:

  • The qualifying period required to bring an unfair dismissal claim will increase from 1 year to 2 years for employees who commence employment on or after this date. Employees whose period of continuous employment began on or before 5 April 2012 will still be subject to the one year qualifying period.
  • Various Tribunal reforms, which are aimed at speeding up and reducing the cost of the Tribunal system, will take effect as follows:
    • Employment judges will hear unfair dismissal cases alone in the Tribunal, unless they direct otherwise.
    • The maximum amount of a deposit order, which a Tribunal can order a party to pay as a condition to continuing with Tribunal proceedings, will increase from £500 to £1,000.
    • The maximum amount of a costs order, which a Tribunal may award in favour of a legally represented party, will increase from £10,000 to £20,000.
    • Witness statements are to be taken "as read" unless a Tribunal directs otherwise.
  • Statutory sick pay will increase from £81.60 to £85.85 per week.
  • Legislation will be introduced to remove the controversy around whether compromise agreements can be legally binding in respect of claims arising under the Equality Act 2010.

October 2012

  • Pensions auto-enrolment will begin for larger employers. From 1 October 2012, employers with 50 or more employees will have to enrol eligible "jobholders" in a pension scheme. They will be able to use their own existing occupational pension scheme or personal pension scheme if it meets statutory quality requirements. Otherwise, they will have to enrol jobholders in the National Employment Savings Trust (NEST), a central scheme to be set up by the government.
  • Jobholders will be free to opt out of either type of scheme once they have joined. But while they remain active members, their employers will be required to pay a minimum level of pension contributions.
  • The national minimum wage may increase, depending on what the Low Pay Commission recommends in February.

Other unknown dates in 2012

There are also some developments, with no confirmed date, that are likely to be progressed in 2012. These are as follows:

  • Penalties for employers who breach employment rights.
  • Early compulsory ACAS conciliation of all Tribunal claims.
  • The amendment of the whistle blowing rules so that disclosures about breaches of employment contracts are no longer covered.
  • The simplification of compromise agreements.
  • Consultation on 'protected conversations' between small employers and their staff about employment issues without risk of dispute/litigation.
  • Consultation on a rapid resolution scheme as an alternative to a Tribunal claim for low-value and straightforward disputes.
  • The acas Disciplinary and Grievance Code is to be 'looked at' with a view to creating a simpler dismissal process.

Privacy, PHRs and (without) prejudice

The Employment Appeal Tribunal has decided, in Eversheds LLP v Gray, that a Pre-Hearing Review ('PHR') should be held in private, if it considers the admissibility of ‘without prejudice’ communications that may be covered by privilege.

The Respondent unsuccessfully applied for a PHR in private to deal with the admissibility of ‘without prejudice’ correspondence, and successfully appealed.

The Employment Appeal Tribunal considered the importance of public hearings, and held that it was in the interests of justice that parties in civil disputes could negotiate with a view to resolving disputes in the knowledge that those discussions would remain private and confidential, directing that a private PHR should take place.

The Employment Appeal Tribunal also indicated that a Case Management Discussion (CMD), which is a private hearing, would not be the appropriate way to deal with disputes about the admissibility of ‘without prejudice’ communications.

Adjournment for unwell Claimants

The Employment Appeal Tribunal decided, in O'Cathail v Transport for London, that the Tribunal should not have proceeded to hear a claim in the Claimant's absence, when he applied for a second adjournment on the basis of his ill-health, for which the Claimant was not at fault.

The Tribunal accepted that the Claimant was ill, but refused the adjournment, for reasons which included the amount of time which had passed by since the alleged events, which the Claimant was complaining of, had taken place. The decision was overturned on appeal.

The Employment Appeal Tribunal will only examine adjournment decisions in limited circumstances. Where the fairness of the proceedings as a whole is endangered, it will consider whether the decision to adjourn was a fair solution.

Redundancy and suitable alternative employment

The Employment Appeal Tribunal has decided, in Readman v Devon Primary Care Trust, that an employee can act reasonably in refusing an offer of suitable alternative employment, even where the Employment Tribunal correctly concludes that a reasonable employee would have accepted the employer's offer.

The Claimant, a nurse, was placed at risk of redundancy and offered three alternative posts by her employer. One of the posts, a Hospital Matron position, was correctly found by the Employment Tribunal to amount to suitable alternative employment. The Claimant refused this post on the grounds that, having worked in community nursing for many years, she had no desire to return to a hospital setting. She was denied a redundancy payment by her employer. The Employment Tribunal similarly refused the Claimant a redundancy payment on the grounds that her refusal had been unreasonable. In reaching this conclusion, the Tribunal asked itself whether a reasonable employee would have accepted the employer's offer. It concluded that they would have done so.

The Employment Appeal Tribunal held that the Tribunal had made an error in applying an objective test to the question of reasonableness. The proper question for a Tribunal, when considering whether a refusal of suitable alternative employment is unreasonable, is whether the employee in question acted reasonably in refusing the offer. This will involve a consideration of whether the reason, given by the individual, constituted a sound and justifiable reason for turning down the offer.

The Employment Appeal Tribunal allowed the appeal and held that the Claimant was entitled to receive a redundancy payment.

acas issues guidance for the Olympics

acas has issued guidance on how to deal with any employment issues arising from the Olympic Games this summer. You can find the guidance here. It covers issues arising for those who do, and don't, want to take time off, and has a useful Q&A section for both employers and employees.

Disclosure of documents held overseas

The Employment Appeal Tribunal has decided, in Weatherford UK Ltd v Forbes, that an Employment Judge does not have the power to order a party outside Great Britain to disclose documents.

The Claimant obtained orders against the Respondent, a UK subsidiary of a Texas-based company, for recovery of documents held overseas by its parent company, including notes of an interview conducted with the Claimant by American attorneys acting for the parent company, and an order for additional information.

The Employment Appeal Tribunal upheld the Respondent's appeal against the orders.

The Employment Appeal Tribunal held that the power of Employment Judges to order recovery of documents does not extend overseas. The Employment Appeal Tribunal observed that it would be difficult to see how the Respondent could be ordered to disclose documents held by its parent company outside the UK.


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SRA number 404293