Red Tape Day April 2014: A guide to employment law changes

BusinessZone
Dan Martin
Former editor
BusinessZone.co.uk
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Twice a year, the government introduces a range of regulation changes. Known as 'common commencements dates' or 'red tape day', the aim is to make it easier for businesses to comply.

Emma Hamnett, senior associate at law firm Clarke Willmott LLP, highlights five of the most prominent employment law changes introduced by the government on 6 Apri 2014 and what they mean for employers and employees.

1.  Introduction of Advisory, Conciliation and Arbitration Service (ACAS) early conciliation

A new system of ACAS early conciliation or 'EC' has come into operation. The system is optional between 6 April 2014 and 5 May 2014 and compulsory for all new employment tribunal claims issued after 6 May 2014. 

Under the EC scheme, prospective claimants in "relevant proceedings" are required to lodge a form with ACAS before submitting a claim to the employment tribunal. ACAS will then attempt to contact the claimant to discuss conciliation. If the prospective claimant or respondent cannot be contacted and if conciliation does not in fact take place or if conciliation does take place and is unsuccessful ACAS will issue a certificate confirming that the conciliation process has been followed. The certificate will contain a unique reference number. The prospective claimant will not be able to issue their employment tribunal claim without the EC certificate reference number.

The intention behind the scheme is to encourage settlement discussions and early resolution of disputes. However there is no obligation on either the prospective claimant or respondent actually to engage in discussions with the other side. Therefore whether this new regime has an actual impact on early resolution and the number of claims lodged remains to be seen.

2. Introduction of financial penalties for employers who lose tribunal claims
 
Employment tribunals now have a new discretionary power to impose financial penalties of between £100 and £5,000 on employers who lose employment tribunal claims where there are "aggravating features" present.
Aggravating features is not defined and ultimately this will be for the tribunal to decide taking into account any factors which it considers relevant, including the circumstances of the case and the employer’s own particular circumstances.
 
Employment tribunals can impose the penalty irrespective of the nature of the remedy awarded, although where a financial award is made the penalty must be 50% of that award (subject to the overall cap of £5,000). The employer's ability to pay the penalty must also be taken into account.
 
Explanatory notes to the legislation provide non-exhaustive guidance on the sorts of matters that may be taken into account. Factors more likely to lead to the imposition of a penalty are where the employer is a large organisation with dedicated HR Support, where there are long or repeated breaches of employment laws or deliberate, malicious or negligent behaviours. Mitigating factors less likely to lead to a penalty include it being a small or newly-established employer with limited HR support; short or one-off breaches and/or where the matters complained of amount to honest mistakes.
 
3. Repeal of the statutory questionnaire procedure
 
The statutory framework under which individuals can ask questions about discrimination in the workplace has been repealed. 
 
This is good news for employers who, under the old regime often would be faced with discrimination questionnaires served sometimes only as a litigation tactic to drive up costs and to extract information from an employer for use in proceedings before the disclosure exercise properly got underway.
 
The statutory framework has been replaced by non-legislative best practice ACAS guidance setting out how job applicants and employees can ask questions about discrimination and equal pay under the Equality Act 2010 and how employers should respond to such questions. 
 
4. Employment disputes: Amendments to the employment tribunal fees system
 
A new system of charging fees in the employment tribunal system was introduced on 29 July 2013. Under this system, claims now brought in the tribunal attract an issue fee and a hearing fee.  The level of fee depends on whether the claim is categorised as 'Type A' or 'Type B', with Type B claims attracting a higher set of fees. 
 
Certain claims which had been incorrectly categorised as Type A have been re-categorised as Type B, thereby attracting higher fees.  This includes equal pay claims, claims of a failure to inform and/or consult under TUPE 2006 and certain claims under the Working Time Regulations 1998. This change is retrospective and does not apply to claims presented before 6 April 2014 in relation to hearings after this date. 
 
5. TUPE and pensions 
 
The new employer (transferee) how has the option of matching the old employer's (transferor) level of employee contributions. This represents an alternative to the previous position whereby a transferee had to match the employee's chosen contribution rate up to 6%. 
 
The government elected to introduce this reform to avoid employees being in a more favourable position than they would have been in had they not transferred.  
 
Other changes:
 
Statutory sick pay, maternity and redudancy pay
 
The statutory sick pay rate has increased from £86.70 to £87.55, while maternity pay, ordinary, additional paternity and adoption pay has risen from £136.78 to £138.18. In addition, the maximum amount of a week's pay for calculating statutory redundancy pay has changed to £464 and the new maximum redundancy payment is £13,920.
 

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