Anne Palmer takes a look at this month's key employment law news stories, including a raft of changes coming into force next week; family-friendly and surrogacy developments; zero-hours contracts and, finally, reports on the dramatic drop-off in employment tribunal claims and its possible implications.

April shower of changes

There are several new employment law developments taking effect next week.

From 6 April 2014, discrimination questionnaires will be abolished, and a more informal approach will be adopted (although adverse inference may still be drawn from a failure to adequately respond to questionnaires issued before 6 April).  As we reported back in January, in the absence of a formal questionnaire procedure, Acas has published guidance on how employers should respond to questions under the Equality Act.

The maximum compensatory award for unfair dismissals where the effective date of termination falls on or after 6 April 2014 will be increased to £76,574 (or 52 weeks' gross pay, if lower). The maximum amount for a 'week's pay', for the purposes of various statutory calculations, will increase from £450 to £464.

And as we have previously reported, on 6 April 2014 we will also see the introduction of early conciliation (on an optional basis, with compulsory conciliation in May), financial penalties for employers who lose at employment tribunal and annual increases to statutory compensation limits. Please see last month's news round-up for more details.

As part of the government's major review of health at work, from 6 April 2014 the 'Percentage Threshold Scheme' will be abolished.  This is a scheme which enables employers to reclaim Statutory Sick Pay from HMRC, where the total SSP paid in a month exceeds 13% of their Class 1 National Insurance Contributions for that month. The government feels that this scheme discourages employers from tackling long-term sickness absence.  It is intended that the support offered by the proposed new independent occupational health assessment service for employees who have been absent for more than 4 weeks, will operate an equivalent level of assistance for employers with high levels of employee sickness absence.  However, the new service is not expected to be operational until the end of 2014 at the earliest and there does not appear to be any alternative support in the interim period.

Finally, changes to the current pension protection regime that operates on a TUPE transfer of employees will come into effect on 6 April 2014. They offer the transferee employer the option of matching the outgoing employer's level of employee contributions as an alternative to the current requirement of matching the employee's chosen contribution rate up to 6%. The changes are intended to reflect the introduction of the employer auto-enrolment duties, particularly the minimum contribution requirement, and to prevent a situation whereby an incoming employer must pay a higher level of contributions than either the employee's old employer, or that required by the Pensions Act 2008.

Family friendly changes

Several changes are being introduced in relation to working parents, under the Children and Families Act 2014, which received Royal Assent on 13 March 2014.

  • 30 June 2014: the right to request flexible working will be extended to all employees with 26 weeks' service. The current statutory procedure that employers must follow when considering flexible working requests will be replaced with a duty on employers to consider requests in a reasonable manner, supplemented by a statutory code of practice from Acas.
  • 1 October 2014: fathers and partners will be able to take time off to attend up to two antenatal appointments.
  • 5 April 2015: Mothers, fathers or adopters will be able to opt to take shared parental leave within the first year after the birth or adoption placement. This will apply to parents of babies due or children placed for adoption on or after this date. Adopters' pay and leave entitlements will also be brought into line with those of birth parents. Please see our article on shared parental leave for more information.

Zero-hours; zero rights?

The latest development in relation to the controversial question of zero-hours contracts is that the House of Commons Library has published a Note which suggests that zero-hours contracts may be open to abuse, so it may be necessary to implement some form of regulation, if not a ban. It is unclear how or when this is likely to happen.  The government has also been seeking responses to a consultation on zero-hours contract. The consultation closed on 13 March 2014 and we await the government's response. However, since the consultation closed, Acas and CIPD have published their full responses. Acas has suggested that exclusivity clauses in zero hours contracts are likely to be detrimental to relations between employers and employees. It calls for new guidance on zero hours contracts, to ensure that employers and employees understand their working arrangements. However, CIPD has taken this a step further and recommended that the government bans exclusivity clauses in zero hours contacts unless employers can demonstrate a "compelling business reason" for their use.

Surrogacy arrangements

As we reported in 2013, there have been conflicting views on the maternity rights of employees whose babies are born through surrogacy arrangements.  The Court of Justice of the European Union has now provided its judgment in the case of CD v ST and has said that a 'commissioning mother' in a surrogacy arrangement does not fall within the scope of the Pregnant Workers Directive, even when she has mothered and breastfed her child within an hour of the birth.  In this case, the Court decided that although maternity leave is intended to protect the special relationship between a woman and her child, the grant of maternity leave pursuant to the Directive presupposes that a worker has actually been pregnant and given birth to a child.  The Court also found that an employer's refusal to provide maternity leave to a commissioning mother does not constitute discrimination on the grounds of sex contrary to the Equal Treatment Directive.

Fewer tribunal claims - but for how long?

The latest set of official employment tribunal statistics have been keenly awaited, as they show an accurate reflection of the number of claims being processed by the tribunal system now that the new fees regime, introduced in July 2013, has started to bed down.  The results will be cheering to most employers, as there has been a 79% drop in claims for the period October-December 2013, compared to the same period in 2012.  It is widely thought that the sharp drop-off in claims is a result of the introduction of fees for the use of employment tribunals. This is, however, unlikely to be the last we have heard on this question.  The Judicial Review of the legality of the decision to introduce fees was unsuccessful, largely because there was insufficient statistical evidence of the impact of fees at the time the review was lodged (please click here for a summary).  The court made it clear that the Lord Chancellor would have to amend the fees regime if future statistics showed that fees were preventing access to justice.  It is, therefore, very possible that fees arrangements may be adjusted, if not withdrawn altogether.