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Employment Issues in 2012

20-12-2011

Julie Taylor of Gardner Leader LLP looks ahead at some of the main issues lined up for employers in 2012. If you would like to discuss any employment issues please contact Julie Taylor on 01635 508181.

Changes in employment law

As business counts down to the Christmas break, employers are being reminded to prepare themselves for changes to employment law set for introduction over the coming year.

The Government is expected to put forward a number of measures aimed at reforming employment law and, whilst we wait to hear the detail, some changes have been confirmed, such as the Pension Act.

Pensions

The Pension Act received Royal Assent and became law last month. This means that the pension age for women will rise to 65 in 2018; the age for both men and women will rise to 66 by October 2020 and to 67 at some time between 2026 and 2028.  This follows on from the abolition of the default retirement age (DRA) in October this year and will mean that workers can choose to carry on working after the state pension age and choose when to start taking their state pension.

The abolition of the default retirement age has happened at the same time as figures show over a 30 per cent increase in the number of age discrimination claims presented to employment tribunals. For employers, this change means ensuring there are age-friendly attitudes and policies in place.

Unfair Dismissal 

The Government has also announced that there are likely to be changes to the qualifying period for unfair dismissal and changes to various consultation procedures.

The proposal to increase the qualifying period of employment before an employee is eligible to bring an unfair dismissal claim from one to two years has been widely reported.

However, as there have been previous attempts to have a longer qualifying period, this may face significant resistance. The qualifying period was originally set at two years, but this was challenged as being discriminatory, and consequently was reduced to its current one-year level.

The Government has presented this as a way to boost employment, hoping that small to medium sized businesses will be encouraged to take on employees, by having more flexibility on staffing decisions over the extended two year period.

Opponents have said that young people would be hardest hit by the relaxed rules as they are most likely to be last in and first out, whilst more experienced workers are likely to be retained.

Compromise Agreements

Various changes are also anticipated to the use of compromise agreements.   When an employee is dismissed the employer and employee often enter into a compromise agreement, under which the employee receives some compensation and agrees not to make a claim for unfair dismissal. The intention is to replace these with ‘settlement agreements’ which will be simpler and have standard wording.

The Government also plans to introduce ‘protected conversations’ in which employer and employee will be able to discuss issues without fear of subsequent retribution or accusations.

It is hoped that this will enable open discussions about performance, retirement plans and other issues.

However, the employer will not be protected against claims of discrimination or harassment arising out of a protected conversation and so, in practice, their use may be limited.

Employment Tribunals

A review of the procedural rules of tribunals will take place, and the procedures for bringing a claim for unfair dismissal will be reviewed.  This includes plans for a one month conciliation period amongst other proposals.

TUPE

The effectiveness of the TUPE regulations (the Transfer of Undertakings (Protection of Employment) Regulations) which protect employee’s rights when a business is sold or transferred will also be reviewed.

Small employers

Finally, the Government plans to introduce simplified dismissal procedures for micro employers with less than ten employees, and introduce no-fault compensated dismissals.

Summary

The Government hopes that these reforms will help to bring down unemployment and stimulate investment and expansion, by cutting red tape and the risks involved in taking on new staff.

However, as many details are yet to be confirmed, we will have to wait and see which changes are implemented.

Ultimately, for employers it is likely that a number of changes to policies and procedures will be required, although any changes should only be made once the proposals are confirmed. In the meantime, the end of the year is a good time to review current practice.

Employers should ensure they have robust processes in place, as if we do see the unfair dismissal qualifying period increase, it’s likely that other claims will increase, such as age discrimination.

Businesses should also ensure that they are up to date with changes that have been implemented this year, such as the Bribery Act and the new agency workers provisions.


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