News & Events

Top 5 Employment Law Issues for HR IN 2013

By: David Morgan

Submitted by Firm:
Burness Paull
Firm Contacts:
Ronald Mackay
Article Type:
Legal Update

There were plenty of employment law developments in 2012.  So, what does the year ahead look like for 2013?  Many of the developments speculated or reported on in 2012 may well see the light of day and become law this year.  Like a list of New Year's resolutions (for an HR/ employment law geek, at least!), here's my 'Top 5':

1.  Collective Redundancies

From 6 April 2013, the minimum consultation period for employers proposing to dismiss 100 or more employees as redundant at one establishment will be reduced from 90 to 45 days.  This is the period of consultation required before the first dismissal takes effect.  Despite how the popular press reported it, it's about the period of consultation required; not the notice that employers must give to dismiss employees.

2.  Employment Tribunal fees

Probably the most talked-about proposal from the employment tribunal reform agenda is the proposal to charge a fee to lodge a claim.  Curiously, this pretty radical change has been met with mixed reaction from the HR community - probably since the level of fees mooted seemed pretty 'racy'.  The Employment (Industrial) Tribunal service was established to provide a relatively informal forum in which to deal with workplace disputes.  But I'm sure that all would agree that many claims have become increasingly complex and litigants have had little fear of exposure to costs/ expenses.  So the introduction of lodging (and hearing) fees is likely to be a welcome introduction to weed out the more spurious claims that many employers face, particularly following the economic downturn.  

Fees will range between £160 and £1,200 and are due to become law from summer 2013.  The corollary is that employment tribunals will also be able to impose financial penalties of up to £5,000 on employers who are found to have breached an employee’s rights where there are “one or more aggravating features".

These changes are sure to change settlement and defence tactics for HR professionals advising the business.  We should also see the behaviour of claimants and their representatives changing as fees will need to be stumped up before a claim can be pursued.  Pre-claim conciliation at ACAS is all well and good, but might you not be inclined first to see whether an employee will ‘put her money where her mouth is' by paying the tribunal fee first before you explore settlement? 

3.  New Employment Tribunals Rules

We'll see new rules of procedure for the Employment Tribunal service from April 2013.  This followed a public consultation last year with a view to ensuring effective case management, such as simplified and streamlined procedures for preliminary hearings and withdrawing cases.  The key focus is to give the Tribunal a power to strike out claims at a preliminary stage.  This could certainly be helpful for HR teams dealing with more spurious claims, but I'm sceptical whether judges will use the powers in practice.  After all, we've had more limited rights of strike-out and deposit orders in the past (and judges have had their knuckles rapped by the appeal courts for over-stepping the mark with hasty strike-outs before).  For me, as a proponent of mediation, I'd like to see more of the proposed "new rule that gives employment tribunals and employment judges a clear mandate to encourage and facilitate the use of alternative forms of dispute resolution at all appropriate stages of the tribunal process".

4.  Terminating Employment & Unfair Dismissal

The Enterprise and Regulatory Reform Bill contains a number of measures relating to the law on unfair dismissal.  A date for its implementation has not yet been announced, but it is expected to become law in 2013.  In particular, it proposes a power to reduce the compensatory award for unfair dismissal claims (currently £72,300, and due to increase to £74,200 on 1 February 2013) to one year’s median earnings (approximately £26,000) or one year’s actual earnings for the employee in question, whichever is lower.

We might also finally see the introduction of the so-called "protected conversations", when the relevant provisions of the Bill become law.  These are designed to allow employers and employees to have a conversation and make a settlement offer if they feel that the employment relationship is not working, without that conversation being admissible as evidence in an unfair dismissal claim (but, beware, it will still be admissible in other claims such as discrimination).

And, don't forget that we'll start to see the effect of last year’s increase in the qualifying period to claim unfair dismissal (from one year to two years) when we hit the anniversary of this new law on 6 April 2013.  Until then, there has been no difference in practice.  But from that date, employees who started with you on or after 6 April 2012 will have to wait another year (or 51 weeks to be precise), before they accrue the right to claim unfair dismissal.

5.  Employee Shareholders

And last but not least, the real curve-ball for me in 2012 was the proposal to introduce an altogether new status of worker - the "Employee Shareholder".  This proposal is expected to come into force in April 2013 and allows companies to give shares to employees in return for them relinquishing some of their employment rights, such as unfair dismissal and statutory redundancy pay.  The consultation on this one was lukewarm to say the least, so HR professionals are likely to treat this with a degree of caution.  It might be of more interest to smaller fast-moving or start-up businesses.

There's my 'starter for 5'.  I'm sure that there will be plenty more to follow too.  Let me know what you think and if there are any others on your radar for the New Year.