Legal alert

legal alertApril 2014

A monthly checklist of new and pending laws, regulations, codes of practice and rulings that could have an impact on your business

This month

 

New scheme: employers and the new Acas 'early conciliation scheme'

Employers should be prepared for the new Acas 'early conciliation scheme' if an employee intends to bring an Employment Tribunal claim against them. This will, in some circumstances, extend the time within which employees can then bring a claim.

From 6 May, anyone who wants to bring a claim in the Employment Tribunals must first go through a new Acas early conciliation scheme. Potential claimants must submit their names and addresses, and those of the other side, to Acas. An Acas conciliation officer will then 'endeavour to promote a settlement' for a month – although this period can be extended for up to two weeks. The process is free and impartial, and all discussions are 'without prejudice'.

If at any time within the early conciliation period the conciliation officer decides a settlement cannot be reached (including because reasonable attempts to contact the other party have failed), he or she issues a conciliation certificate.

The limitation period does not run during the conciliation period, so if the time limit for lodging a claim would expire during the conciliation period, that time limit is extended for a further month. This means the usual three-month time limit for bringing a claim could be extended by, in some cases, up to two and a half months.

Operative date 

  • 6 May 2014

Employment law compensation and redundancy limits increased

Employers should now be budgeting for new increases in redundancy and compensation limits. Increased limits on compensation for unfair dismissal, redundancy and other employment law events take effect on 6 April 2014.

The main changes to the limits are:

  • An increase in the amount of a 'week's pay' for the purposes of calculating statutory redundancy pay and the basic award for unfair dismissal, from £450 to £464.
  • An increase in the compensatory award for unfair dismissal, from £74,200 to £76,574. This is subject to a cap of 12 months' pay, introduced in July 2013, which means anyone earning less than £76,574 per annum will receive less.

The new limits apply where the redundancy, dismissal or other event giving rise to the compensation occurs on or after 6 April. The old limits continue to apply where the event is before that date.

Operative date

  • 6 April 2014

New rules: sick pay reforms could damage small businesses

From 6 April 2014, businesses lose the right to reclaim statutory sick pay (SSP). However, they may benefit from a new occupational health service due to be introduced later in the year.

Under the previous SSP rules, employers paid a worker who had been signed off as sick £86.70 per week. Once the SSP exceeded 13% of the total National Insurance bill for the period, employers could recover it under the Percentage Threshold Scheme (PTS). This was designed for small employers who could not afford the cost when too many workers were off sick.

PTS is abolished from 6 April 2014 meaning employers have to pay the SSP, and for any replacement workers needed, with no right of recovery – a particular burden for small businesses. Since SSP is £87.55 per week from that date, an employee absent for a long period can now cost up to £2,450 for 28 weeks or more of absence.

The abolition of the PTS is to release funds for a new Health and Work Service - an occupational health service for small business to which any worker off sick for four weeks must be referred. However, the new service (intended to save businesses up to £70m a year in reduced sickness pay and related costs) is not due to be up and running until late 2014.

Operative date

  • 6 April 2014

Case law: employer's policy of keeping decisions under review inadvertently extended time limit for discrimination claim

Employers with a policy of keeping potentially discriminatory decisions under review should review this, as it may inadvertently extend the time limit for bringing a discrimination claim.

An employer refused to make an adjustment for a disabled employee by transferring her from its Ealing office to another office nearer her home. However, its policy was to keep such decisions under review.

The Employment Tribunal ruled that requiring her to work at Ealing was a provision, criterion or practice that caused her a substantial disadvantage compared to those who did not suffer her disability, and she had made a case that moving her to a nearer office would be a reasonable adjustment. The employer's refusal was therefore discriminatory unless it could show otherwise.

The employer argued that the employee had failed to make her claim within three months of the refusal and was therefore out of time. Her response was that the policy of keeping the decision under review meant it was still a 'live' decision – it was a continuing act of discrimination, which was therefore to be treated as completed only at the end of the review period.

The Employment Appeal Tribunal agreed with the employee. It said the policy of keeping such decisions under review meant the discriminatory decision (the employer's breach of its duty to make reasonable adjustments) was a 'continuing state of affairs' during the review period. In this case the duty to make reasonable adjustments had to be satisfied 'on each day that it remains a duty'.

Operative date

  • Now

New rules: employees' new rights to request flexible working set for 30 June

New rules allowing all employees with 26 weeks or more service to request flexible working come into force from 30 June 2014. Currently, only those who have children under 17 (or 18 if they have a disability) or who care for an adult dependent have the right to request flexible working.

The existing procedure requiring a written request from the employee to work flexibly, a discussion, etc within time limits will no longer apply. Under the new rules, an employer must deal with requests in a 'reasonable' manner and within a 'reasonable' period of time. A statutory code of practice will give employer's guidance on how to deal with requests, including what 'reasonable' means, and what to do if requests clash with each other.

Employers may receive, for example, requests from employees who want to work a shorter day or through lunch breaks, work remotely, job-share or not work a particular day of the week.

The grounds for refusing a request remain in force, including additional cost, inability to reallocate work to existing staff and not enough work during the hours to be worked under the request.

Operative date

  • 30 June 2014

Case law: employers who victimise ex-employees after they leave can still face claims

Employers should be careful not to victimise former employees who are bringing discrimination claims against them, following a Court of Appeal ruling. They must also review their policies on the provision of references to ex-employees to minimise the risk of a claim.

An employee who was dismissed because he had reached the age of 65 claimed unfair dismissal and age discrimination. His former manager gave him a poor reference when he applied for a new job and the ex-employee brought a victimisation claim. The issue was whether the law allows ex-employees to bring victimisation claims after their employment has ended.

There is victimisation in law when an employer subjects a worker to a detriment because he or she has made a claim of, for example, discrimination or harassment by the employer. Prior to the Equality Act 2010, ex-employees could bring claims for victimisation by their former employers that took place after they had left their jobs. However, under the new law it appears that ex-employees could not bring such a claim.

In this case, the Court of Appeal ruled the fact that ex-employees were protected from victimisation before the 2010 Act meant Parliament must have intended that protection to continue after. The court also took into account that EU law says ex-employees must be protected from victimisation. The ex-employee could therefore bring his claim for victimisation.

Operative date

  • Now

Case law: dismissal for pregnancy-related absence after maternity leave not discriminatory

An employer could dismiss an employee for sickness absence for post-natal depression without it being discriminatory, because the absences were after maternity leave had ended, a Tribunal has ruled.

An employee was dismissed for absence caused by post-natal depression after her maternity leave had ended. She claimed sex and/or pregnancy and maternity discrimination. The employer argued that dismissal for a pregnancy-related illness could not be discriminatory if the illness was after the end of maternity leave.

The Employment Appeal Tribunal agreed with the employer. As she was dismissed after the end of maternity leave, there was no unlawful discrimination. Her claim for direct sex discrimination also failed. Her employer was entitled to compare that part of her period of sickness absence taken after the end of her maternity leave with a comparable period of sickness for a man - even if her absence was pregnancy-related.

Operative date

  • Now

Case law: director liable for environmental offences 

 

Company directors should note the seriousness with which environmental law breaches are treated, and the extent of potential sanctions. Any environmental concerns raised by outside agencies and authorities must be responded to promptly by businesses.

In a recent case, Arcwood Recycling Ltd and a director of the company pleaded guilty to charges relating to the pollution of the Ereswash Canal in October 2012. The company was fined £8,000 with an order to pay £7,500 in costs. The director was given a ten-month custodial sentence and disqualified from being a director for eight years.

The Environment Agency (EA) had noted concerns of poor or non-existent management systems for the site, including stockpiling too much wood for the site to operate properly. A Compliance Assessment Report was sent to the company detailing a breach of permit condition preventing waste being stored for more than three months. Further concerns were raised by, for instance, fire officers and the owners of the site.

In September 2012 a fire started at the site and the fire service fought the fire for some nine days, during which time firefighting water run-off entered the canal killing thousands of fish. More than 6km of canal was affected and the EA spent £200,000 on dealing with the environmental impact.

In the aftermath, the EA served a suspension notice but the director ignored a Regulation 60 Notice which required site information to be provided, and a request to interview him. When he was sentenced, the judge noted that the director had flagrantly disregarded the warnings given by the EA and the fire service. This was reflected in the sentencing, though credit was given for his guilty plea.

Operative date

  • Now

 

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