News

This article was written by Pam Loch and appeared in Director of Finance Online on 26 March 2009

Here we are almost in April once again with more changes in employment law ahead.  What changes are looming and what should you be doing about them?

Holiday Entitlement 

From 1 April 2009 the minimum holiday entitlement increases form 24 days to 28 days.  The 28 days includes any entitlement to bank or public holidays.   Therefore if your employees’ terms and conditions of employment state the employee is entitled to 20 days plus 8 bank or public holidays or just refers to 28 days then you can sigh with relief. If the terms and conditions don’t state that then you need to review your terms and increase your employees’ entitlement to that level.

Increases to Sick Pay, Statutory maternity, paternity and adoption pay increases

With effect from 5 April 2009 the weekly rate of pay for employees entitled to paid maternity (SMP), paternity (SPP) and adoption leave (SAP) will increase from £117.18  to £123.06.Statutory sick pay (SSP) will also change from 6 April 2009 and the weekly rate of pay for SSP will increase to £79.15. Right to Request Flexible Working Extended Employees with children up to the age of 16 years will be given the right to request flexible working from 6 April 2009. If you have a flexible working policy or procedure then you should need to review it to bring it up to date with this development.

Important Changes to Disciplinary, Grievance and Dismissal Procedures

The 6th of April has been long awaited by employment lawyers and HR practitioners as that is the day the Employment Act 2008 comes into force and repeals the dispute resolution procedures.  It will sweep away the statutory disciplinary, grievance and dismissal procedures and in its place the ACAS Code will become a best practice guide. The current procedures place an obligation on employers to follow prescribed statutory procedures.  A failure to follow the procedures would result in an automatically unfair dismissal and potentially a financial penalty of up to 50% on top of any award made.   The Act removes this and in its place employers and employees will be required to act reasonably when dealing with disciplinary issues or raising grievances. One factor in deciding reasonableness will be whether or not the Code has been followed.   However that will only be a factor and not a determinative one.  If the Employment Tribunal panel decides one of the parties has acted unreasonably then it can increase or decrease any award made by up to 25%. The ACAS Code starts off from the premise that resolving disputes informally is the preferred route, suggesting mediation as one option to achieve this.  It then sets out ACAS’ recommendations on how to handle situations if the formal route has to be followed. The formal route is not too dissimilar to the statutory procedures but the crucial difference is that employers will no longer be exposed to an automatic finding of unfair dismissal if they do not follow the procedures to the letter.  The employer would however have to explain why they chose not to follow the suggested process.  One point to note though is that Code does not apply to dismissals on the grounds of redundancy. As the Code does not dramatically change the statutory procedures it is not essential that you review your policies and procedures.  It is important though to consider training managers to deal with situations in an informal way at an early stage to avoid being left with no alternative but to apply the Code and your formal internal processes.You should be aware though that there are some complex transitional arrangements in place and therefore do not assume the Code will apply automatically from 6 April 2009.  Early advice should be sought on a case by case basis.

Increased Penalties for a Failure to Pay the National Minimum Wage  

HMRC and the Agricultural Wages Inspectors are responsible for enforcing the obligation to pay the national minimum wage.  They were given enhanced powers to carry out investigations in January 2009 and from 6 April 2009 the system will change again so that a single notice of underpayment will replace the separate enforcement and penalty notices currently issued. In addition, the notice of underpayment will require the employer to pay a financial penalty to the Secretary of State within 28 days. The penalty will be based on 50% of the total underpayment with a minimum penalty of £100 and a maximum penalty of £5,000.If the employer complies with the notice within 14 days of its service, the financial penalty will be reduced by 50%.   If you have not checked you pay all your employees at least the national minimum wage you should consider doing that asap.

Trade Union Membership Rules

6 April 2009 also brings in changes to the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) and the circumstances in which a trade union may be able to expel or exclude an individual on the basis of their membership or former membership of a political party.

Changes to Employment Tribunal Procedures 

With effect from 6 April 2009 a new system will be introduced to enable Employment Tribunal Judges to sit alone to make determinations.  This is designed to introduce a fast-track process to deal with cases where every party agrees to a judge alone hearing their case or where the Respondent(s) has failed to present a response or do not contest the claims against them.   

Other miscellaneous changes come into effect, including extending the Employment Tribunals’ powers to make default judgements and dismiss claims on withdrawal.   Many of these are technical changes which will have little impact on how you manage your employees on a day to day basis.     

Although there are quite a few changes afoot the good news is that deluge of changes from 6 April 2009 onwards should benefit employers.