Employment law developments in 2013 and 2014 Revised March 2014

Chartered Institute of Personnel & Development Document copied from website 19:03:2014 by Gill Coffin Some hyperlinks may not work ask me to log in to get more information if required. Employment law developments in 2013 and 2014 Revised March 2014 In this factsheet Keeping up with employment law Major changes to employment law in 2013 Major changes to employment law so far and those still expected in 2014 Useful contacts Keeping up with employment law This factsheet outlines the major changes to employment legislation in 2013 and 2014. CIPD members can see fuller and more detailed information in the Employment Law at Work area of our website. It includes legal timetables, law FAQs, case law reports with implications for employers, and a latest news page which is updated weekly. There is also a six-monthly law update, written by Stephen Taylor, our Professional Development Scheme Examiner for Employment Law, intended primarily for tutors and students studying the employment law module of our qualifications, but which HR practitioners may also find useful. Go to our Employment Law at Work web area As regional governments continue to implement their own take on particular policies, the Scottish and Northern Ireland situation may differ from that in England and Wales. CIPD members can see our factsheet outlining the key differences between Northern Ireland and Great Britain. Go to our factsheet on Employment law: key differences between Northern Ireland and Great Britain Major changes to employment law in 2013 From February Increased limits on employment tribunal awards came into force on 1 February: o a 'week's pay' rose from 430 to 450 o the maximum compensatory award for unfair dismissal rose from 72,300 to 74,200 o the maximum basic award (and redundancy payment) rose from 12,900 to 13,500 o guarantee pay increased from 23.50 to 24.20 a day. In March Unpaid parental leave increased to 18 weeks on 8 March to comply with the EU Parental Leave Directive. In April The rate of statutory sick pay (SPP) increased on 6 April from 85.85 to 86.70. The rates of maternity allowance and statutory maternity pay (SMP), statutory paternity pay (SPP), and statutory adoption pay (SAP) increased on 7 April from 135.45 to 1

136.78. The weekly earnings threshold for these payments also increased from 107 to 109. All employers had to start reporting PAYE information in real time (except where HMRC has specified a later date) - from 6 April. The90-day minimum collective redundancy consultation period for large-scale redundancies was reduced from 90 days to 45 days - from 6 April. Further changes to immigration rules and fees from 6 April. CIPD members can see our factsheet on immigration law changes. Go to our Immigration law changes factsheet In May Certain old and minor cautions and convictions are no longer disclosed on a DBS (previously CRB) certificate from 29 May. In June A new Disclosure and Barring Scheme update service was introduced from 17 June. Whistleblowing changes came into force from 25 June. No qualifying period is required to bring a claim for unfair dismissal if the reason for the dismissal is political beliefs or affiliations from 25 June. In July A salary-based cap on compensatory reward for unfair dismissal applies from 29 July. Employment tribunal fees apply from 29 July. Following the Underhill Review, measures to simplify employment tribunal procedures and costs were introduced from 29 July. Compromise agreements are now called settlement agreements, with a new statutory Code of Practice and guidance from 29 July. In September The new employee shareholder status (previously known as employee owner ) which was passed in the Growth and Infrastructure Act was introduced. Those accepting employee shareholder contracts will agree to giving up certain employment rights in return for company shares - from 1 September. In October National Minimum Wage rates increased from 1 October: the standard adult rate to 6.31, the development rate for those aged 18-20 to 5.03, the young workers rate for those aged 16-17 to 3.72, and the apprentice rate to 2.68. The third party harassment provisions of the Equality Act 2012 were repealed from 1 October. Further immigration rules changes came into effect. Employment-related Acts and Bills A number of employment-related Government Bills progressed through Parliament. The wide-ranging Enterprise and Regulatory Reform Act 2013 included changes to employment tribunal claims, procedures, settlement and compensation; whistleblowing; health and safety; and provisions in the Equality Act 2010, as well as many other smaller changes and non-employment-related issues. CIPD members 2

can see our factsheet outlining the employment law changes. Go to our Enterprise and Regulatory Reform Act 2013 factsheet The Growth and Infrastructure Act 2013 introduced the new employee shareholder status which came into effect in September 2013. The Children and Families Bill was introduced to House of Commons on 4 February 2013 and continued through to the 2013-14 Parliamentary session. The Pensions Bill bringing further changes to the state pension was introduced to the House of Commons on 9 May 2013 and continued through to the 2013-14 Parliamentary session. European developments The Parental Leave Directive (2010/18/EU) - repeals and replaces the Parental Leave Directive (96/34/EC). The permitted parental leave period following birth or adoption of a child is increased from 13 to 18 weeks. Member states were required to implement this change by 8 March 2012 but the UK Government decided to use the additional year s grace to implement the change. The changes came into effect in the UK on 8 March 2013. Major changes to employment law so far and those still expected in 2014 The Government s Employment Law Review, led by the Department for Business, Innovation and Skills (BIS), started in 2010 and will run into 2015. Its overall aim is to reduce the regulatory burden on business and introduce greater flexibility to the labour market. Many of the resulting changes were introduced 2013 but there are still plenty in the pipeline, together with other law changes which will affect employers. The Queen s Speech on 8 May 2013 opened the 2013-14 Parliamentary session. The Children and Families Bill and the Pensions Bill were both introduced in the previous session: The Children and Families Bill became an Act on 13 March 2014 and the Pensions Bill is still continuing through Parliament. New Bills were announced which will affect employers to varying degrees: Deregulation Bill, Immigration Bill and National Insurance Contributions Bill these are all currently passing through Parliament. The changes expected to be introduced in 2014 are outlined below. This factsheet will be updated during 2014 as changes come into force and other implementation dates are announced. From January Pensions auto-enrolment - employers with 350-499 employees will be expected to offer a qualifying pension scheme to their staff by the start of 2014. CIPD members can see more information on auto-enrolment on our pensions pages developed in partnership with KPMG. Go to our pensions pages Nationals of Bulgaria and Romania, the A2 countries who joined the EU in 2007, had their restrictions on working in any EU Member State lifted from 1 January. Find our more on employing migrant workers from our factsheet. Go to our factsheet on Employing overseas workers 3

Transfer of undertakings reform changes to the TUPE Regulations came into effect on 31 January. Find out more from our factsheet. Go to our TUPE factsheet In March Penalties for employers who do not pay the minimum wage rose substantially from 7 March. BIS has published information on the new penalties. Changes to spent convictions the period during which certain convictions need to be disclosed to potential employers was reduced from 10 March. The Ministry of Justice has published guidance on the changes. In April The regulation freeze will continue from 2014 and is extended to businesses with fewer than 50 employees, These businesses will be exempted from new regulations if there is any evidence that they will result in disproportionate burdens that could impede growth. Applies to new regulations which come into force after 31 March 2014. Under the National Insurance Contributions Bill, an employment allowance will be introduced entitling every business and charity to a 2,000 reduction in employer national insurance contributions (NICs) bills each year. The allowance can be claimed from 6 April 2014, subject to Parliamentary approval. HMRC have published a calculator and information on how to claim it. Pensions auto-enrolment the time period for employers to auto-enroll eligible jobholders into a qualifying pension scheme is extended from one month to six weeks. The deadline for providing information to the Pensions Regulator is also extended from 1 April. Early conciliation through Acas will be introduced. Claimants will have to send details of their dispute to Acas, who will attempt conciliation and settlement, before the claimant can initiate an employment tribunal claim will be introduced on 6 April. The discrimination questionnaires provisions by which a person can obtain information about potential discrimination from an alleged discriminator will be removed from the Equality Act 2010 from 6 April. Acas guidance has been issued. Employment tribunals will be able to levy a financial penalty up to a maximum of 5,000 on employers found to have breached an employee s employment rights will be introduced on 6 April. The maximum civil penalty for illegally employing an immigrant is expected to rise from 10,000 to 20,000 if approved by Parliament from 6 April. The rates of statutory sick pay (SPP) will increase from 86.70 to 87.55 from 6 April. The Percentage Threshold Scheme, which allows employers to reclaim statutory sick pay in certain circumstances, is to be abolished from 6 April. The rates of maternity allowance and statutory maternity pay (SMP), statutory paternity pay (SPP) and statutory adoption pay (SAP) will all increase from 136.78 to 138.18 from 6 April. Increased limits on employment tribunal awards will come into force on 6 April: o the maximum compensatory award for unfair dismissal will rise from 74,200 to 76,574 o a 'week's pay' will rise from 450 to 464. In June The right to request flexible working will be extended to all employees with 26 weeks' service from 30 June. Acas are producing a new Code of Practice and non- 4

5 statutory guidance for employers. In October National Minimum Wage rates will increase from 1 October: the standard adult rate to 6.50, the development rate for those aged 18-20 to 5.13, the young workers rate for those aged 16-17 to 3.79, and the apprentice rate to 2.73. Employment tribunals will be able to order an employer to carry out an equal pay audit in circumstances where it is clear they have breached the equal pay provisions in the Equality Act 2010 expected in October. Employment-related Acts and Bills The Children and Families Bill received Royal Assent on 13 March 2014. It introduces a new shared parental leave system and statutory shared parental pay, a right to time off for antenatal care, changes to adoption leave and pay, and extends the right to request flexible working to all employees. The changes will be take place in 2014-15. The Pensions Bill bringing further changes to the state pension was introduced to the House of Commons on 9 May 2013, continues its progress through Parliament. The National Insurance Contributions Bill, introduced to Parliament in October 2013 introduces a new employment allowance to reduce employers NI contributions bill. The allowance can be claimed from 6 April 2014, subject to Parliamentary approval. The Immigration Bill, introduced to Parliament in October 2013, contains provisions to further reform the immigration system. The Deregulation Bill, introduced to Parliament in January 2014, aims to reduce the burden of excessive regulation on businesses and repeal legislation which is no longer of any practical use. For employers, the main interests are the introduction of approved English apprenticeships and removing the power of employment tribunals to issue wider recommendations. Consultations and their outcomes Zero hour contracts the Government consultation which focused on the particular issues of the use of exclusivity clauses and transparency, has now closed. Read our response. Shared parental leave and pay the Government has published three draft Regulations for consultation and is intending that shared parental leave will come into effect for babies due on or after 5 April 2015 or children matched or placed for adoption on or after that date. Simplifying recruitment legislation a consultation on agency workers legislation has taken place and the Government has indicated that it intends to change the existing legislation. Whistleblowing The Government called for evidence on the current whistleblowing legislation and their response is awaited. Caste discrimination - a consultation is expected in 2014 on introducing caste as an aspect of race under Equality Act 2010. European developments Working Time Directive review following a second consultation, the social partners expressed interest in negotiating themselves on the review. Further talks

were held and they had until 31 December 2012 to reach an agreement. However no agreement was reached and the European Commission is considering its next step. The Posted Workers Directive on 9 December 2013 the Council of Employment and Social Ministers agreed a general approach on the proposed Directive. The Free Movement of Workers Directive in 2013, the European Commission adopted a proposal for an enforcement directive to facilitate the free movement of workers in the EU. The EU Presidency is taking forward Council discussions on the proposal. CIPD members can see our factsheet on how the European Union affects UK employment law. Go to our factsheet Employment law: EU influences 6