On April 6, 2014, key employment law changes come into force.
An increase to Employment Tribunal fees will see a re-categorisation of a number of “Type B” claims, which attract a higher fee. This is to remedy what the Government has identified as a mistake in the original legislation which categorised certain claims incorrectly as “Type A”.
Tribunals will be given the power to order that a losing employer pay a financial penalty (of between £100 and £5,000) where the case has “aggravating features”. This will apply in cases presented on or after April 6, 2014.
The introduction of this penalty sends out mixed messages. On the one hand, the Government is trying to reduce burdens on business, making it less costly for employers to be faced with Tribunal claims.
However, on the other hand, given litigation risk and the prospect of a potentially heavy fine, employers may feel that they are being put under undue pressure to settle unmeritorious claims.
There is also a lack of clarity on what will amount to “aggravating features”, which are not explained or defined in the legislation.
The Government has suggested that Tribunals would impose such penalties where “the breach involves unreasonable behaviour” (for example negligence or malice). However, genuine mistakes by the employer will not be penalised.
The Percentage Threshold Scheme, which currently enables employers to reclaim Statutory Sick Pay from HMRC in some circumstances, will be abolished. This will no doubt be an unwelcome change for employers.
The maximum compensatory award for unfair dismissals where the effective date of termination falls on or after April 6, 2014, will be increased to £76,574 (or 52 weeks’ gross pay, if lower).
Statutory Sick Pay will increase to £87.55 per week (the lower earnings limit will also increase to £111.00 per week).
Statutory Maternity, Paternity and Adoption Pay will increase to £138.18 per week.
The maximum weekly payment (used for calculating redundancy) will also increase to £464 per week.
The maximum civil penalty for employing adult illegal workers – who are subject to immigration control but who do not have the right to work in the UK – will increase from £10,000 to £20,000.
Statutory discrimination questionnaires will be abolished – as discussed in last month’s article.
Mandatory pre-claim ACAS conciliation will involve a four-step procedure of early conciliation through ACAS before a Tribunal claim can be commenced. Transitional provisions cover the period between April 6 and May 5, 2014, where early conciliation will be voluntary but for claims issued on or after May 6, 2014, it will be mandatory.
This is a substantial change in employment law as it has never before been mandatory for parties to Tribunal proceedings to consider conciliation. Pre-claim conciliation is part of the Government’s aims to increase the efficiency of the Tribunal service.
However, it remains to be seen whether it will have the desired effect.