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Various changes have been made to employment law over the summer, including whistleblowing, a secondary unfair dismissal cap, pre-termination negotiations, Employment Tribunal fees, compromise/settlement agreements and employee shareholders. We summarise these changes below and then comment on the impact of the changes on employers.
In addition, we are running a free webinar on key employment law reforms, their impact on Tribunal claims and what this means for employers. The date is being finalised but is likely to be in October. Please email us if you would like to be informed once the webinar is open for signing up.
Pre-termination negotiations (PTNs) are similar to "without prejudice" discussions, but do not require there to be an existing dispute in order for the conversation to be protected. Since 29 July 2013, discussions with a view to the employment being terminated on agreed terms are inadmissible in unfair dismissal cases (except "automatically unfair" dismissals) provided there is no "improper behaviour".
ACAS has published a Code of Practice on Settlement Agreements which provides non-exhaustive guidance on what constitutes "improper behaviour". For example, bullying, intimidation, undue pressure and harassment are among those examples given as inappropriate, along with not giving the employee a reasonable time to consider the offer. It is important that employers who plan to use PTNs are familiar with what constitutes improper behaviour.
On 29 July 2013, a secondary cap on unfair dismissal awards was introduced. Compensation for claims made after this date is capped at the lower of one year's pay or the existing statutory limit, currently £74,200.
Important changes have been made which affect "protected disclosures" made on or after 25 June 2013, as follows:
Employers should ensure that their whistleblowing policies are updated to reflect these changes. Given the risk of vicarious liability, employers should take steps to draw their employees' attention to the policy and provide specific training.
Compromise agreements have been renamed settlement agreements. It is the same agreement, simply with a new name. The conditions that applied to compromise agreements, for example that the employee receives independent legal advice, continue to apply to settlement agreements.
Employers should amend the references to compromise agreements in any standard agreement used.
For all claims submitted on or after 29 July 2013, Claimants have had to pay a fee to issue the claim and will pay a further fee if the case proceeds to a hearing.
There are two levels of fee depending on the type of claim (regardless of how much the claim is worth):
Employment Tribunals can (and are likely to) require employers to reimburse Claimants for fees they have paid if the claim is successful.
Two separate challenges to the Government's decision to introduce fees have been brought and full hearings are expected in October 2013. The Government has given an undertaking to refund any fees if they are subsequently found to be unlawful.
On 1 September 2013, a new "employee shareholder" status was introduced whereby employees can waive certain employment rights, including their rights to claim "ordinary" unfair dismissal and a statutory redundancy payment, in exchange for at least £2,000 worth of shares.
We are not expecting many employers to choose to make use of this status, but you may wish to consider whether it would be beneficial for your organisation.
The Government's key objective in making these changes is to reduce the number of claims made and encourage employers to employ more people without what has been seen to be employment restraints. In our view the changes will go some way to achieving these aims.
For more information please contact Christopher Bushnell, Associate
T: +44 (0)20 7427 6427