Latest Employment Law News

FORTHCOMING EMPLOYMENT LAW CHANGES
Effective from April 2011

The maximum compensatory award for Unfair Dismissal increased from £65,300 £68,400 on 1 February 2011. The maximum amount of a week’s pay used to calculate a number of employment related payments increased from £380 to £400.  The new limits apply where the event that gives rise to the award of payment occurs on or after 1 February 2011.

Despite most of the provisions of the Act coming into force on the 1 October 2010, there are some provisions that have come into force in April 2011, namely those relating to positive action in recruitment and promotion. Positive action provisions mean that it is not unlawful discrimination to take special measures aimed at alleviating disadvantage or under-representation experienced by those with any of the protected characteristics.

The new positive action provisions mean that it is not unlawful to recruit or promote a candidate who is of equal merit to another candidate, if the employer reasonably thinks that the candidate;

• has a protected characteristic that is underrepresented in the workforce; or
• that people with that characteristic suffer a disadvantage connected to that characteristic.

However, positive action does not allow an employer to appoint a less suitable candidate just because that candidate has a protected characteristic that his under-represented or disadvantaged.

The transitional "phasing-out" arrangements came into force on 6 April 2011. During this period, employees will not be able to issue new notifications of compulsory retirement at the age of 65. Notification issued before 6 April 2011 can continue as long as the date of retirement is before 1 October 2011 and the employer has complied with the applicable retirement statutory procedures. After 1 October 2011, employees will be prohibited from retiring employees by reason of the current default retirement. Employers should review their contracts and policies to ensure necessary amendments are made.

From 6 April 2011, a father of the baby due (or matched for adoption) on or after 3 April 2011 will be allowed up to 26 weeks additional paternity leave if the mother returns to work after 20 weeks. Some of the leave may be paid if taken during the mother’s maternity pay period and the rate of the Statutory Maternity, Paternity and Adoption Pay has increased from £124.88 per week to £128.73 per week as of 3 April 2011.

The standard rate of Statutory Sick Pay has increased from £79.15 to £81.60.

From 6 April 2011, all parents with children under 18 will have the right to request flexible working arrangements. Employers will have a duty to consider such requests seriously.

The statutory right to make a request in relation to study and training will not be brought into force for employees in businesses with fewer than 250 employees. The right has been available to employees of organisations with more than 250 employees since April 2010.

The new rules for Tier 1 and Tier 2 applications came into force on 6 April 2011. Those who applied for leave to enter or remain under Tier 1 and Tier 2 category prior to 6 April 2011 will have their applications considered under the old rules.

Most significant changes are the abolition of Tier 1 (General) and Tier 1 (Post Study Work) categories.

The changes include new points tables for Tier 1 and Tier 2, a simpler route for very highly skilled workers without Masters Degree and greater flexibility for the short-term transferee for companies.

From 6 April 2011, two new routes have become available to high net worth applicants wishing to reside in the UK. The two new investor routes are:-

• those that are able to invest at least £5 million will qualify for indefinite leave to remain after three years (with six-month residency each year) and,
• those that are able to invest at least £10 million will qualify for indefinite leave to remain after two years (with six-month residency each year).

Such investors will be able to apply for citizenship after five years.

With effect from 6 April 2011, a new Tax Code will apply to payments made to employees after the employment has terminated and they have been issued with P 45. Post termination payments such as payment in lieu of notice, bonuses and any taxable compensation payments will now be taxed under the new Tax Code which means that payments will be taxed as if they were made in the ordinary course of employment at the applicable tax rate rather than the standard 20% rate. An employer will therefore be obliged to deduct income tax on termination payments at the appropriate tax rate (that is, 20% for basic rate taxpayers, 40% for higher rate taxpayers or 50% for additional rate taxpayers.)

The first £30,000 of any ex-gratia payment paid as compensation on the termination of employment pursuant to a Compromise Agreement can still be tax-free with the pre-6 April 2011 position.

IMPOSING DEADLINE AND LEGISLATION
TO COME INTO EFFECT ON 1 JULY 2011

The Act is now intended to come into force on the 1 July 2010.  See section ‘On-going Consultations’.

The Remuneration Code came into effect on 1 January 2011. The original code only applied to the largest banks, building societies and broker-dealers. Not all firms are required to comply with the rules. Any firms falling within the scope have until 1 July 2011 to meet their obligations. 

LEGISLATION TO COME INTO EFFECT 1 OCTOBER 2011

Agency workers will be entitled to equal treatment in respect of certain basic "employment" conditions from 1 October 2011. The Regulations give Agency Workers the same basic employment conditions after 12 weeks in a given job as if they had been employed directly by the end user.  See section ‘On-going Consultations’.

ON-GOING CONSULTATIONS

This Regulation is due to come into force on the 1 October 2011. The legislation will give Agency Workers the entitlement to the same or no less favourable treatment with respect to basic employment and working conditions, if and when, they complete a qualifying period of 12 weeks in a particular job.

The draft Guidance has been published and feedback was invited to be submitted by 15 April 2011. The Government expects to finalise the Guidance by the end of April or soon after.

"Resolving Workplace Disputes" consultation has been published. The proposals include: –

• increasing the minimum qualifying period for unfair dismissal claims to 2 years;
• payment of a  fee to lodge a claim;
• requiring all claims to be submitted to ACAS before a tribunal to allow a period of pre-claim conciliation;
• reviewing formula for calculating awards and payments.

The consultation closes on 20 April 2011.

The Takeover Panel has published a consultation on proposed amendments to its Takeover Code. This Code applies to the takeover of publicly listed companies in the UK. The proposed changes require the offeror to be held to any statement and are required to make further statements.
The consultation closes on 27 May 2011.

The above Guidance has been published. The Act is due to come into force on the 1 July 2011. The Guidance sets out six guiding principles, each followed by commentary and examples. The principles are: –

• proportionate procedures;
• top-level commitment;
• risk assessment;
• due diligence;
• communication (including training);
• monitoring and review;