2013 Employment Changes

Numerous government initiatives were announced in 2012 including proposals to assist workplace dispute resolution, to reform the Employment Tribunal system and to reduce the burden of regulation on business.  The aim of all these initiatives is to boost economic recovery and remove any barriers to growth.  The result is some significant employment law changes in the months ahead.
 
Details of the increases in the statutory rates and limits payable in 2013 were recently published.  From 1 February, the maximum limit on the amount of a week’s pay for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal increases from £430 to £450 where the effective date of termination falls on or after 1 February.  The maximum compensatory award for unfair dismissal increases from £72,300 to £74,200 and the guarantee pay limit for a day’s pay during short-time or temporary lay off increases from £23.50 a day to £24.20 (subject to a maximum of 5 days or £121 in any 3 months).
 
March will see changes to the Equality Act 2010 as well as an increase in the period of parental leave from 13 weeks to 18 weeks in respect of each child while, as always, April is one of the key months of the year for implementation of employment law changes.  This year is no different with increases in the statutory payment rates, significant changes to collective redundancy consultation and whistle-blowing legislation and the introduction of the concept of employee-shareholder status.
 
From 6 Aprilstatutory sick pay increases from £85.85 to £86.70 a week with the weekly earnings threshold increasing from £107 to £109.  From 7 April the statutory maternity, paternity and adoption pay prescribed rate increases from £135.45 a week (or 90% of normal weekly earnings if lower) to £136.78 (or 90% of normal weekly earnings if lower) and the weekly earnings threshold will be £109.  Maternity allowance increases from £135.45 to £136.78 and there is no change to the earnings threshold of £30.
 
Changes to the collective redundancy consultation period involving 100 or more employees are expected from 6 Apriland the consultation period will be reduced from 90 days to 45 days.  The rationale for the change is that the longer consultation period was too inflexible for many organisations.  The process for large scale redundancies is often completed well within the 90 days but because of the compulsory consultation period, restructuring might be delayed and employees at risk of redundancy unable to take up alternative employment.  Interestingly, the government has announced that the new 45 day period is a minimum period and organisations may consult for longer where appropriate.
 
Another significant development is that employees engaged under fixed-term contracts which are due to expire, will be excluded from the collective redundancy consultation requirements.  Draft Regulations setting out details of the changes are expected shortly.
 
Legislation will also be introduced shortly to remove the current loophole so as to prevent employees bringing whistle-blowing claims which relate to matters such as personal contractual issues that are not in the public interest.  As a result, there will be a change to the definition of “qualifying disclosure” to refer specifically to disclosures “in the public interest”.  
 
Meanwhile, government guidance is expected shortly on the proposed employee-shareholder status.  In essence, employee- shareholders will trade in certain employment rights, such as the right to a statutory redundancy payment, in return for shares in a company and any growth in the value of the shares would be exempt from capital gains tax. 
 
In November 2012, the government published its response to that part of the Consultation on Modern Workplaces consultation paper which related to flexible working and shared parental leave.  The government plans to extend the right to request flexible working to all qualifying employees (26 weeks continuous employment) from 2014 and the new system for shared parental leave from 2015.
 
These changes will be implemented through the Children and Families Bill which is not yet published but which is expected to be introduced in Parliament in April.  ACAS will be producing a Code of Practice and Guidance on the extended right to request flexible working for consultation. 
 
With so many changes ahead, one thing is for sure.  2013 is set to be a busy year for all employers.  Advance planning and preparation is essential if you don’t want to be caught out by reforms to employment law. 
 
Joanne Davies is an employment lawyer and partner with Morgan Cole. Further information and employment law advice is available at www.morgan-cole.com/employmentlaw.
 
Joanne can be contacted at joanne.davies@morgan-cole.com or alternatively on +44 029 20 385385.