Aside from news of the new Royal Prince, the other hotly
anticipated media event of this month is (possibly) Mike
Smith's round-up of July's employment law
developments. William and Kate will not be the
only people adjusting to a new world of change this month: in the
employment law sphere, we have seen some key developments this
month, including the introduction of fees in the employment
tribunal and employment appeal tribunal, new employment tribunal
rules, the re-naming of Compromise Agreements as 'Settlement
Agreements' and the introduction of ‘pre-termination
discussions’. We also report on the ‘employee
shareholder’ scheme and a new whistleblowing call for
Employment reform – July 2013 changes
With effect from 29 July 2013, the following law reforms
are now in place (please click here for a more detailed overview of the
- Compromise Agreements are now called 'Settlement
Agreements'. There is no change to the substance
of these agreements; this is a re-naming exercise only.
- The new Acas Code of Practice on Settlement Agreements is
now effective. Please click here to download a copy.
Failure to follow the Code will not make an organisation
liable to proceedings or lead to an adjustment of any compensatory
award, but the guidance in the Code will be taken into account by
employment tribunals in relevant cases and failure to follow its
recommendations could lead to adverse findings against the relevant
party. Please note that the guidance recommends
a minimum period of 10 days for an employee to
consider an offer of settlement and seek advice.
- Pre-termination discussions in relation to ordinary
unfair dismissal claims are now prevented from being heard in
evidence in any subsequent tribunal proceedings.
Note, however, that this change applies to ordinary unfair
dismissals only – there is no change to the rules around
pre-termination discussions relating to other claims (e.g.
whistleblowing, automatically unfair dismissal, breach of contract,
- The cap on unfair dismissal awards is now the lower of
£74,200 or one year's gross pay, i.e. claimants who earn less than
£74,200 per year will have their compensatory award capped at a sum
equivalent their annual salary. The cap applies
where the effective date of termination is on or after 29 July
- The new Employment Tribunal rules are now in place. The
new rules now apply to all claims in the employment tribunal
system, regardless of the Claimant’s date of dismissal or date that
their claim was lodged.
- Fees are now payable in Employment Tribunals and
Employment Appeal Tribunals. Claims made to the employment
tribunals or appeals made to the Employment Appeal Tribunal on or
after 29 July 2013 will attract fees. There
has been an unsuccessful application for an injunction to prevent
the introduction of fees, but a Judicial Review of this matter will
take place in October 2013. A Scottish
application for Judicial Review of employment tribunal fees will
also probably be heard in October 2013.
- The Ministry of Justice has published a series of
leaflets on fees, mostly aimed at Claimants but you may wish to
read the leaflets on Employment Appeal Tribunal Fees and the Stakeholder Factsheet.
The Act which will implement the new ‘employee
shareholder’ scheme has now received Royal Assent and will be in
force on 1 September 2013 (paragraph 2 of the Growth and
Infrastructure Act 2013 (Commencement No. 3 and Savings) Order 2013
(SI 2013/1766)). For a summary of the employee
shareholder scheme, please see our ‘Fire at Will?’ item in our
October 2012 update.
A 'call for evidence' on the framework of whistleblowing
laws has been announced. The Government is
seeking feedback on whether the current arrangements for protection
of whistleblowers is working effectively, or whether further
changes are necessary. This consultation is
separate from the whistleblowing reforms which came in on 25 June
2013 and closes on 1 November 2013. You can download the
consultation document here.