All change in employment law - what to expect in 2012 and beyond
Limits on Tribunal compensation awards to increase
As of the 1st February 2012 the following employment tribunal compensation limits will increase:
| Compensation Limit | Current | From 1st February 2012 |
| Maximum compensatory award for unfair dismissal | £68,400 | £72,300 |
| Maximum limit of a week's pay | £400 | £430 |
| Minimum basic award for certain unfair dismissals* | £5,000 | £5,300 |
*Dismissal for reasons of: trade union membership or activities, health and safety duties, pension scheme trustee duties and acting as an employee representative)
The maximum limit on a week's pay will increase from £400 to £430 both for the purposes of calculating redundancy pay and the basic award in unfair dismissal cases.
2012 Statutory payment rates
From the 1st April 2012 the following rates of statutory benefits will apply:
| Statutory benefit | Current | From April 2012 |
Statutory maternity, paternity and adoption pay | £128.73 £102 | £135.45 £107 |
| Statutory sick pay Weekly earnings threshold for the above payments | £81.60 | £85.85 £107 |
| Maternity allowance Earning threshold for the above allowance | £124.88 £30 | £135.45 £30 |
The qualifying period for unfair dismissal increasing from 1 year to 2
From the 6th April 2012 the qualifying period for submitting an unfair dismissal case to the Employment Tribunal will increase from one year to two. Whilst there has been some confusion in relation to when and how this change will come into effect, the Department for Business, Innovation and Skills (BIS) has now confirmed the increase in the qualifying period will only apply to those starting a new job on or after 6 April 2012. Employees whose employment started before 6 April will remain subject to the one-year qualifying period.
It should be borne in mind that there are numerous claims that employees with less than two years service will still be able to pursue, including discrimination claims and claims for “automatic unfair dismissal”, such as those relating to pregnancy, health and safety issues annd whistleblowing.
Consultation on charging fees in Employment Tribunals and the EAT
Currently all claims brought either to the Employment Tribunal or the EAT are free. However on 14 December 2011 the Ministry of Justice launched it’s consultation ‘Charging Fees in Employment Tribunals and the Employment Appeal Tribunal’.
The consultation will close on the 6th March 2012 and is looking to obtain views on the following two options:
- The first option is that Claimant’s would be charged an issue fee when they present their claim and a hearing fee. The amount charged would depend on the nature of the claim and if the claim is part of a multiple case. In this option the cost for an individual claimant to bring an unfair dismissal claim would be £200 for the issue fee and £1,000 for the hearing fee.
- The second option would see the Claimant only paying the issue fee which would be determined by the value the Claimant said his or her claim was worth. Going back to the example of an individual bringing a claim for unfair dismissal, they would have to pay a issue fee of £500 if they stated that their claim was worth less than £30,000, or £1,750 if they valued their claim to be more than this.
Simplification of compromise agreements
In November 2011 the government confirmed that it would commence a further consultation to consider the use of compromise agreements. The consultation will consider if the current process is too complicated and how it would be possible to include all existing and future claims without having to list every possible cause of action to be compromised in the agreement.
Penalties for employers
Tribunals will soon have the option of imposing a financial penalty on employers who have lost in Tribunal proceedings. This money would be paid to the Exchequer and would be in addition to any costs awarded to the Claimant.
The amount to be paid by the Respondent would be half of the total award made by the tribunal. A maximum of £5,000 would be set alongside a minimum of £100. This penalty would be reduced by 50% if payment was made within twenty one days.
Protected Conversation Proposals
In 2011 David Cameron confirmed the governments intention to consult on protected conversations. If these are introduced it would allow employers to talk frankly about performance issues or retirement which could not then be relied upon on in any future Tribunal cases.
Early ACAS conciliation
It is planned that all claims presented to the Employment Tribnal, will initially be forwarded to ACAS to try and resolve the matter firstly through compulsory pre-claim conciliation (PCC).
This will be offered for one month, where if either party refuses to cooperate the case will head straight to tribunal as per the current system. However if both sides are willing to cooperate then the limitation periods for commencing proceedings (in most cases 3 months) will be put on hold. The Claimant would then have one month to present their case to tribunal if the PCC process was unsuccessful.
Witness expenses
Tribunals will be given powers to direct parties to bear the costs of witness attendance, including the costs of witnesses called by the successful party. The government will withdraw state-funded expenses. This could have a significant impact on costs in Employment Tribunal proceedings, particularly where Claimants insist on calling numerous witnesses.
