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Employment Law - What to Expect in 2013

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2012 has been a very busy year in employment law, with significant changes to the law surrounding pensions, sick leave and paid holiday and the minimum wage. However, it does not stop here and the Government has continued to follow its ‘Red Tape Challenge’ by proposing a number of further changes to employment law for next year. There is a vast amount of potential new legislation on the horizon, which will make for an interesting year ahead.

Let’s take a look at what is on the menu for 2013.

Growth and Infrastructure Bill

In the last few months the biggest area of controversy in employment law has been the proposals under the Growth and Infrastructure Bill for “employee owners” which would mean that employees would forfeit many of their employment rights in return for shares in the company.

This Bill, which the Government hopes to have introduced by April 2013, will insert a new section 205A into the Employment Rights Act 1996 (“ERA 1996”), whereby the employer and employee can agree that in consideration for the employee becoming an ‘employee owner’, rather than an employee, the company will issue or allot between £2,000 and £50,000 worth of shares to that individual. In return for this the employee owner would lose the following current employment protection rights:

  • Right not to be unfairly dismissed (except in health and safety cases, automatically unfair cases, or cases where the dismissal is discriminatory under the Equality Act 2010);
  • Right to a statutory redundancy payment;
  • Right to request time off for study or training under section 63D of the ERA 1996;
  • Right to make a flexible working request under section 80F of the ERA 1996; and
  • The employee owner would need to give 16 instead of the usual 8 week’s notice if they wish to return early from statutory maternity, adoption or additional paternity leave.

Numerous commentators and employment professionals have queried both the practicality and benefits of the proposed changes.  Although stated to be primarily aimed at start-up companies recruiting new employees, this change is also being promoted as a means of freeing up all employers ostensibly so as to have more flexibility in organising their workforce needs. Many have questioned why such a removal of long standing employment protection against unfair dismissal is necessary, when unfair dismissal protection only applies now in any event to employees with more than 2 years service and there is no credible evidence that this protection hampers employers with genuine fair reasons for dismissal, such as redundancy. The proposal seems likely to involve employers in even more red tape and expense (who is to value the shares on offer? additional documentation may be required for each existing employees to waive their employment rights – will it involve independent Adviser advice and fees?) and so the benefits of this proposal and the level of possible take up of it is at the least questionable.

Employment Tribunal Fees

The Government will introduce a two stage fee structure for employment tribunal claims in the summer of 2013. Under these proposals a Claimant will be required to pay an Issue fee of either £160 or £250 and then a Hearing fee of either £230 or £950, depending on the nature of the claim. Unfair dismissal and discrimination claims will attract the higher level fees.

Enterprise and Regulatory Reform Bill

The proposed Enterprise and Regulatory Reform Bill (“ERRB”) is set to introduce a number of amendments. The most important amendments can be summarised as follows:

Early ACAS conciliation. Claimants will now be required to submit the details of their dispute first to ACAS and will then be given a pre-claim conciliation period of one month, which stops the limitation clock. If conciliation does not occur in this month, at the end of it, Claimants will have one month to present their claim to the tribunal.

Repeal of third party harassment provisions. Employers will no longer have to take reasonable steps to protect employees from third-party harassment after repeal of section 40(2) and 40(4) of the Equality Act 2010.

Discrimination questionnaires. The discrimination questionnaire procedure under section 138 of the Equality Act 2010 is to be abolished.

Protected conversations. The ERRB will allow employers to propose or discuss termination settlements with employees, without this discussion being used as evidence in a subsequent unfair dismissal claim.

Deposit orders and costs. Tribunals will have their powers extended to make deposit orders if a party wishes to “pursue a specific allegation or argument within proceedings”, as opposed to the current situation where this can only be done if a party wishes to participate in proceedings.

Crime and Courts Bill

This Bill will seek to merge all 170 county courts in England and Wales into a single body, along with proposals for flexibility of judicial deployment, which would allow judges to sit in a wider variety of courts.

Children and Families Bill

The Government has indicated that this Bill could be introduced in April 2013 and would include provisions that extend the right to request flexible working to all employees with at least 26 weeks’ continuous service.

Parental Leave Directive

The Government will by March 2013 implement the Parental Leave Directive into UK law through the Parental Leave (EU Directive) Regulations 2013. This will increase the amount of unpaid parental leave that can be taken per child from 13 to 18 weeks. Unpaid parental leave will still be limited to four weeks per year.

Important Case Decisions

In terms of major case decisions awaited probably one of the most important in terms of impact on future claims is the pending decision of the European Court of Human rights on the group of cases concerned with religion and belief discrimination, two in relation to the inter-relation of sexual orientation discrimination protection and whether that “trumps” religion and belief discrimination protection.

The claims by the individuals concern how the Article 9 right (of individuals to manifest religion and belief) of the European Convention on Human Rights is to be applied by the UK courts. The Claimants in the individual cases all lost their claims for compensation for discrimination in the UK Tribunals and Courts

The European Court of Human Rights (“ECtHR”) is deciding whether restrictions on visibly wearing a cross or crucifix at work amounts to interference with an employees’ right to manifest their religion or belief, which is protected by Article 9 of the European Convention on Human Rights and, if so, whether the UK breached its obligation to protect those rights (Eweida and Chaplin v United Kingdom). The ECtHR will also consider whether an employees’ right to manifest their religion or belief was breached where they were disciplined for refusing to carry out civil partnership ceremonies / provide psycho-sexual counselling to same-sex couples (Ladele and McFarlane v United Kingdom). Both claims had been rejected in the UK courts.

This article was written by Alison Downie, Partner, Employment, with assistance from Chris Smith.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 020 7404 0606 and ask for your usual Goodman Derrick contact.