31/07/2013
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 evidence.
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 changes).
- 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, discrimination).
- 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 2013.
- 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.
Employee shareholders
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.
Whistleblowing
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.
