Employment law - what to expect in 2014
By Julian Cox, Partner at Fletcher Day
January 15 2014 - Happy New Employment Year! 2014 promises to be another year of substantial change in UK employment law. Whilst the timetable is subject to amendment, currently the Government is intending to make the following changes in 2014:
Changes to TUPE
BIS has recently confirmed that significant changes to the current TUPE regime will come into force on 31 January 2014, including the following:
- The current rules relating to service provision changes will remain. However, the legislation will clarify that for TUPE to apply to a service provision change, the activities carried on after the change must be 'fundamentally or essentially the same' as those carried on before it; and
- The obligation to provide employee liability information will remain, but the required information will need to be given 28 days rather than 14 days before the transfer as is currently the case; and
- Change of work place location will be an Economic, Technical or Organisational (ETO) reason, thereby meaning genuine place of work redundancies will no longer run the risk of being automatically unfair; and
- The provisions restricting changes to terms and giving protection against dismissal will no longer apply to changes made for "transfer-related reasons"; and
- Micro-businesses will be allowed to inform and consult with their employees directly where there is no recognised independent union or existing appropriate representatives
Introduction of mandatory pre claim Acas conciliation
On 6 April 2014, compulsory pre-claim Acas conciliation will be brought in requiring potential claimants in employment tribunal proceedings to lodge details of their proposed employment tribunal claim with ACAS in the first instance before bringing a claim. At this point, Acas will contact the parties, offering them the opportunity to engage in pre-claim early conciliation (EC) with a nominated conciliation officer for a prescribed period of a month. If either party refuses EC, or it is unsuccessful (for example if a settlement has not been reached within the prescribed period), the claimant will be issued with a certificate by Acas enabling them to proceed with issuing proceedings in the tribunal. If, however, the parties do agree to enter into EC at this pre-litigation stage, this will effectively "stop the clock" on the limitation period for presenting the claim to the tribunal whilst this takes place.
The introduction of mandatory pre claim Acas conciliation represents another radical reform of the employment tribunal system, following on from the various changes introduced in 2013, in an apparent further attempt by the government to reduce the number of claims coming before the employment tribunal easing the current burden on the employment tribunal service which has stretched its resources in recent years given the prevailing economic climate.
Abolition of Discrimination questionnaires
Also on 6 April 2014, section 138 of the Equality Act is to be repealed, abolishing discrimination questionnaires, which enabled an individual to obtain information from their employer regarding discrimination and to use the information obtained as evidence in tribunal proceedings.
Extension of right to request flexible working
The right to request flexible working will be extended to all employees with 26 weeks' service, with effect from 6th April 2014. Currently, under existing legislation, this right is only afforded to employees who qualify as parents or carers. Employers will also no longer be required to follow the existing statutory procedure in dealing with flexible working requests. Instead they must consider all such requests in a 'reasonable manner'. A statutory code of practice is introduced to give guidance to employers as to the meaning of 'reasonable'. Employers will have the right to refuse requests on business grounds.
Imposition of financial penalties on employers who lose in the employment tribunal
Also expected to come into force from 6th April 2014 is the introduction of the power to levy penalties on employers who lose Tribunal claims.
It is planned that tribunals will have a discretionary power to impose a financial penalty on employers who lose at tribunal where the breach of employment rights has one or more aggravating features.
If the tribunal decides to exercise its discretion to make such an award, the amount of the penalty will be 50% of any financial award. The penalty will be subject to a minimum threshold of £100 and an upper ceiling of £5,000. Where a non-financial award is made, the tribunal will be able to apply a monetary value. Employers will qualify for a reduction of 50% if they pay the penalty within 21 days.
Increase in statutory pay rates
From 6th April 2014, the rate of statutory maternity, adoption, paternity and sick pay will all increase. The new rates have yet to be announced.
In October 2014, the annual increase in national minimum wage rates will also take place. Again, the new rates have yet to be announced.
New approach to sickness absence management
Following a major review of work place sickness absence, it is anticipated that from the Spring 2014 the government will introduce the Health and Work Service, a state funded health and work assessment and advisory service which will offer free occupational health assistance for employers, employees and GPs, including:
- Independent assessment by occupational health professionals of employees who have been off sick for four weeks or more; and
- Case management advice for employees with complex needs who require ongoing support to facilitate their return to work.
The government also intends to abolish the SSP record-keeping obligations and allow employers to keep records in a more flexible manner.
Introduction of equal pay audits
From October 2014, the Government plans to introduce regulations giving employment tribunals the power to order equal pay audits where an employer is found guilty of gender pay discrimination in relation to contractual or non-contractual matters.
A draft order is expected to be issued by the government in October 2014 also under which it will be provided that caste is an aspect of race, therefore making caste discrimination unlawful.
Judicial review of tribunal fees regime.
At some point in early 2014 judgment is expected in respect of the judicial review of the new employment tribunal fees regime first introduced by the government at the end of July 2013.
Two judicial reviews of the new regime are currently progressing through the courts. The public sector union UNISON and Scottish law firm Fox and Partners both applied for judicial review of the introduction of fees. The government has given a Great Britain-wide undertaking that if fees are found by the respective courts to be unlawful, all fees will be repaid with interest.
It is by no means certain that the result of these applications will be and whether the new employment tribunal fees regime will remain. The decision is therefore awaited with keen interest.
With changes in UK employment law continuing to be introduced at a breathless pace, it is vitally important that businesses keep up to date with the latest developments in 2014. As a starting point, it is recommended that employers review their existing employment policies, practices and procedures in light of the latest changes to ensure they are consistent with best employment law practice so as to avoid unanticipated liabilities for their organisation.
Fletcher Day is a full-service commercial law firm located in Central London, who advises UK and international client base on a broad range of legal matters.