BHW Employment Law

NewsletterSpring 2014

Welcome to the Spring 2014 edition of the BHW Employment Law Newsletter.

2014 looks set to follow 2013 in being another year of change. Some highly signifi cant decisions are expected this year on holiday pay calculations, agency workers and collective redundancies.

The changes to the TUPE Regulations and what they mean for employers are set out at page 3.

At page 4 we consider the increase to the compensation rates, penalties and the introduction of fees in the Employment Tribunal.

The ACAS Early Conciliation process which comes into force on 6th April 2014 is set out as page 5.

The right to request fl exible working and the name and shame for breaches of the National Minimum Wage are considered at page 6 and 7.

Page 8 provides an update to the statutory payments which will increase on 6th April 2014.

Finally, if you have any questions relating to the articles featured in the Newsletter or would like advice on a particular query you may have, please do not hesitate to contact me to discuss further.

Laura AllansonHead of Employment0116 281 6237 laura@bhwsolicitors.com

Inside this issue

All change under the TUPE Regulations 3

Increase in compensation rates, penalties and fees in the Employment Tribunal 4

New ACAS compulsory conciliation process 5

The right to request fl exible working 6

Name and shame: government gets tough on employers failing to pay the National Minimum Wage 7

What to expect in 2014 8

BHW Employment Law

Newsletter

2

Editor Laura Allanson. Articles produced by Laura Allanson and Claire Bell.

Laura Allanson is an Associate Solicitor and heads up the Employment department.

She has over 11 years’ experience of dealing with contentious and non-contentious employment matters. Laura joined BHW after 10 years with the National Farmers Union (NFU) and has a wealth of agricultural and horticultural knowledge. Laura has a real ability to ensure that her client’s problems are resolved in a cost-effective and timely manner.

Claire Bell is a Solicitor in the Dispute Resolution and Employment departments and is involved with varied employment and dispute resolution work.

Claire completed a 13 month secondment with the Amateur Swimming Association and gained extensive experience of sports law during her time there.

3

All change under the TUPE Regulations The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) (Regulations) 2014 came into force on 31st January 2014 making changes to the TUPE Regulations 2006.

Dismissal or changes in terms due to relocation

Changes to the terms of a contract of employment can only be made for an economic, technical or organisation (ETO) reason entailing changes in the workforce. The ETO reason now includes a change to the place where the relevant employees are employed.

Pre-transfer consultation where redundancies are proposed

The new employer can now, if the current employer consents, consult representatives of affected transferring employees about proposed dismissals before the transfer takes place. That period of consultation will count towards the 30 or 45 day consultation period.

Collective Agreements

Variation of the contract of employment which seeks to vary a term or condition incorporated from a collective agreement, provided that the variation takes effect on a date more than 1 year after the date of transfer. The rights and obligations in the employee’s contract must be no less favourable than those which applied immediately before the variation.

Any provision in a collective agreement which is negotiated after the transfer does not transfer to the employee if the new employer is not party to the collective bargaining for that provision.

Service Provision Changes

The activities carried out by the new service provider must be fundamentally the same as those that were carried out before the change by the previous service provider for TUPE to apply to a Service Provision Change.

Future changes

From 1st May 2014 the minimum period for the current employer to provide the new employer with ‘employee liability information’ has been increased from 14 days to 28 days before the transfer. This will allow new employers more time to assess the workforce and any potential changes.

From 31st July 2014 micro-businesses (businesses with fewer than 10 employees) where there are no employee representatives and the employer has not invited affected employees to elect employee representatives the employer can consult with the affected employees direct.

4

The introduction in tribunal fees on 29th July 2013 attracted a lot of criticism from various commentators that claimants were being forced to shoulder the fi nancial burden to enforce rights conferred on them by law. From 6th April 2014 the statutory limits on the level of compensation that employment tribunals can award will increase. Tribunals will have the power to impose fi nancial penalties of up to £5,000.00 on employers, where it determines that the employer has breached worker’s rights and the breach has one or more aggravating factors.

We are also starting to see the effects of tribunal fees of respondents. Recent case law suggests that the general position will be that a successful claimant will recover tribunal fees paid from their employer by way of a costs order.

So what does this mean for employers?Increase in statutory compensation limits For most claims the level of compensation that tribunals may award is subject to statutory limits. For example, the maximum unfair dismissal basic award/statutory redundancy payment is £13,500.00 and the maximum unfair dismissal compensatory award is currently £74,200.00 with a new secondary ‘individual’ cap of 52 weeks’ pay introduced in July.

The date for annual increases has been pushed back from 1st February 2014 to 6th April 2014 following implentation of the Enterprise and Regulatory Reform Act (ERRA) 2013.

From 6th April 2014 the new rates will be:

• Weeks’ pay £464.00 (currently £450.00)

• Maximum basic award/statutory redundancy payment £13,920.00 (currently £13,500.00)

• Compensatory award £76,574.00 (currently £74,200.00)

• Basic + compensatory will be £90,494.00 (currently £87,700.00)

Financial penaltiesEmployment Tribunals will have a new power to impose fi nancial penalties on employers in claims involving an employer and worker where it:

1. concludes that the employer has breached any of the worker’s rights to

which the claim relates, and

2. is of the opinion that the breach has one or more aggravating features.

The new power will only apply where the case has ‘one or more aggravating features’.

It remains to be seen how the tribunal will determine what amounts to ‘aggravating features’.

The payment will be payable to the Exchequer (not the claimant). These penalties may be used as a punishment to employers breaching employee rights.

The amount will vary from a minimum of £100.00 to a maximum of £5,000.00. Where a fi nancial award is made in favour of the claimant, the penalty will be 50 per cent of the total award (subject to the minimum and maximum limits).

An early payment discount wil apply to reduce the penalty by 50 per cent if paid within 21 days.

Fees The courts are beginning to consider the issue of repayment fees to successful claimants.

The government guidance considers the general position on the repayment of fees is that if the claimant is successful, the respondent will be ordered to reimburse them.

We will continue to keep you updated on the position with tribunal fees.

Increase in compensation rates, penalties and fees in the Employment Tribunal

5

New ACAS compulsory conciliation process The ACAS Early Conciliation rules come into force on 6th April 2014. (They are optional for the fi rst month, and become mandatory on 6th May 2014).

ACAS, the Advisory, Conciliation and Arbitration Service, currently have a role in attempting to resolve disputes between employees and employers both before and after a claim has been issued.

If an employee wishes to bring a claim against their employer in the Employment Tribunal (ET) they must contact ACAS fi rst. ACAS will appoint a conciliation offi cer who will contact the employer to see if it is possible to conciliate the dispute.

An Early Conciliation Form must be submitted for each employer/respondent.

If the employee or the employer refuse to negotiate, or if a settlement is not possible within one month, the Conciliator will issue a certifi cate and this will enable the employee to commence a claim in the ET.

The employee will then have one month from the date of the certifi cate, or 3 months plus the length of the conciliation period, whichever is later, to start a claim.

The benefi t to employers

• Negotiations will be on a without prejudice basis. This means that any refusal by either party to negotiate and any proposals made by either party, cannot be mentioned in any subsequent ET case if conciliation fails.

• It will provide a warning to employers of an employee’s intention to bring a claim.

• It provides an opportunity to conciliate the claim early. There could be a reduction in legal costs.

• As compensation in most cases is based on the employee’s loss of earnings, the earlier a claim can be conciliated the less likely it will be that an employee will anticipate a prolonged period of unemployment.

6

The right to request fl exible working On 30th June 2014 the Flexible Working Regulations will be amended. The government will extend the right to request fl exible working to all employees after 26 weeks’ service, rather than only those with children under the age of 17 (or 18 if the child is disabled) and certain carers.

The current statutory procedure for considering requests will be removed. Instead employers will have a duty to consider all requests in a reasonable manner. Businesses will however, have the fl exibility to refuse requests on business grounds.

What does this mean for employers

• Employers have a statutory duty to consider all applications provided the employee has 26 weeks continuous employment at the date the application is made.

• Once agreed it becomes a permanent change to the contract of employment.

• An employee has the right to appeal against the outcome.

• The employer can negotiate an agreement if requested hours are not possible.

• Only one application can be made in a 12 month period.

There are many forms of fl exible working. It can describe a place of work, for example, home-working, or a type of contract, such as a temporary contract. Other possibilities are part-time working, fl exitime, job sharing and shift working.

7

Name and shame: government gets tough on employers failing to pay the National Minimum Wage Employers who owe their workers thousands of pounds for failing to pay them the correct National Minimum Wage (NMW) have been named and shamed by Business Secretary Vince Cable.

The government is introducing a series of tougher measures to crack down on employers who fl out NMW law. The naming and shaming scheme came into force on 1st October 2013.

Five employers are the fi rst to be named under the stricter rules, who between them owe workers a total of over £6,800.00 in arrears and have been charged fi nancial penalties totalling £3,381.40.

As well as being publicly named and shamed, employers who fail to pay their workers the NMW will face higher fi nancial penalties of up to £20,000.00 as of 7th March 2014.

This will mean that the fi nancial penalty percentage will increase from 50 per cent to 100 per cent of total underpayments.

5 Grove Court, Grove Park, Enderby, Leicestershire LE19 1SATel 0116 289 7000 Fax 0116 281 6229

Email info@bhwsolicitors.com Web www.bhwsolicitors.com/employment

The content of our Newsletter is provided for general information purposes only and does not constitute legal or other professional advice. This fi rm is authorised and regulated by the Solicitors Regulation Authority - SRA number 383490

We have developed the BHW Employer Support and Protection Schemes to support and protect employers of all sizes with their employment needs. If you would like more information on the schemes please contact Laura Allanson on 0116 281 6237 or email laura@bhwsolicitors.com

Changes to statutory sick pay, maternity pay and other statutory payments will come into force in on 6th April 2014.

• Statutory Sick Pay (SSP) will increase to £87.55 per week (up from £86.70).

• Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP) and Additional Statutory Paternity Pay will increase to £138.18 per week (up from £136.78).

Some of the anticipated legislative and judicial trends for 2014:

Collective redundancy consultation - the trigger, numbers and meaning of proposals.

TUPE - consideration of Economic, Technical and Organisational (ETO) reasons.

Holiday pay - what is normal ‘remuneration’?

Unfair dismissal - gross misconduct and fundamental right?

Health - is obesity a ‘disability’?

Discrimination - questionnaires, enforcement, equal pay and post-employment victimisation.

Zero-hours workers

Sports Direct employ 20,000 workers on zero-hours contracts. They don’t receive paid holiday, sick pay or bonuses which are available to full-time employees. This is being challenged as indirect sex discrimination and under the Part-time Workers Regulations.

Following an information gathering period that took place in late 2013, the government has launched a formal consultation on the use of zero-hours contracts.

What to expect in 2014