Partner Article

A summer of change to employment laws

The Government has just announced a number of changes to employment law which will come into force in summer 2013. However one of the region’s leading employment lawyers believes that the new pieces of legislation are ill-conceived, and could lead to confusion.

Robert Gibson, managing partner and employment law specialist with Samuel Phillips Law Firm, commented: “There are major changes that could affect employers in our region. I would advise that employers take some time to find out about these changes, to avoid being caught unawares. Additionally, there are changes to employment tribunals which are likely to cause confusion and potentially pile extra pressure on all parties.”

The Government is introducing a cap of 12 months’ salary on compensation awards for unfair dismissal cases, or £72,300 (the current limit), whichever is the lower. The compensation will exclude any pension or benefits in kind which the employee was entitled to. However, the cap will not apply to discrimination claims or breach of contract.

Robert commented: “My worry is that people will now be trying hard to shoe-horn their claims into a discrimination case to increase the value of the claim.”

Settlement agreements will also be introduced, allowing employers to initiate discussions with employees to bring their employment to an end with agreed terms. A statutory code is being introduced, with ACAS providing template letters and agreements. Any such discussions are not admissible in unfair dismissal claims in court, unless there has been improper behaviour or undue pressure.

Robert explained his concerns: “The problem is what is meant by improper behaviour or undue pressure. The employer could believe they’re acting appropriately, but ‘shoot themself in the foot’ if they get it wrong.

“In practice, using settlement agreements has the potential to be fraught with difficulty. I can foresee preliminary litigation to decide what was undue pressure or improper behaviour and then the case following that.”

Early conciliation is also being introduced before a tribunal claim can be made. A four week (or six weeks if both parties agree) conciliation period is being introduced to encourage both parties to come to an agreement, and will be conducted via ACAS. Should this conciliation fail, the claimant will receive an early conciliation certificate, allowing them to proceed to make a tribunal claim. Tribunal claims can be brought within three months, though the ‘clock’ stops during the conciliation period, and would begin again should it be deemed to have failed.

Robert said there are a number of pitfalls. He advised: “There will be much confusion about when the four week conciliation period started and ended, and when the revised cut off point to make a tribunal claim is. Additionally, this is a very early point to insist on conciliation, and I suspect for many claimants it will simply be too early. This new legislation is forcing them to attempt conciliation at a pre-determined time, when one or other might well not be ready.

“A similar idea has been tried before, was shown not to work and was abandoned last year. This brings in an additional procedural obstacle to making a claim. Tribunals are restricted by a tight timescale already, and this enforced conciliation period is likely to confuse, and add to the pressure.”

Samuel Phillips offers a comprehensive range of legal services to business and private clients. For any further information, please see www.samuelphillips.co.uk.

This was posted in Bdaily's Members' News section by Emma Hignett, i2i Business Solutions .