Recent changes in employment law

14 Aug 2013

With all the recent changes coming in, we thought it would be helpful to set out a summary of what has changed and what we think.

The new fees have been subject to an application for Judicial Review in Scotland. The case was brought by Fox Solicitors who also applied for an injunction to prevent the introduction of fees.  An injunction was not granted but the Judge ordered the case to go to a full hearing with an undertaking from the Lord Chancellor that any fees paid after 29 July will be refunded if the new rules are found to be unlawful.

In England, the trade union UNISON has announced that it will challenge the introduction of fees through an application for judicial review. The bases of this application will be EU principles of access to legal process, the public sector equality duty and indirect discrimination against women who statistically earn less than men.

Our view:

It is intriguing that the Scottish Judge thought there was a good prima facie case against the fees and that the solicitors who brought the case were awarded their costs.

29 July: Protected Conversations

The original proposals have been watered down.  The new law is that pre-termination discussions may not be used as evidence in ordinary claims of unfair dismissal.   Offers and discussions will still be admissible in cases of automatically unfair dismissal, discrimination and breach of contract.  The rule will not apply to anything said or done improperly.

Our view:

We do not think this will give employers any more certainty in tricky situations.  For instance:

  • An employee is offended by a “difficult” conversation and raises a grievance.  The grievance is not resolved and the employee resigns to claim constructive dismissal.  The grievance is a key part of the story.  Will the law really prevent an Employment Tribunal from considering and adjudicating on it?  We think not.

  • The new law will not help in cases of highly paid executives with long notice periods and generous remuneration packages worth enforcing through an action for damages for breach of contract.

  • The meaning of improper behaviour is unclear.

For the time being, employers will not gain much, if anything, from this change.  Our advice remains to proceed with extreme caution when initiating “difficult” conversations and not to assume the new law gives more flexibility.

29 July: Cap on compensatory awards for unfair dismissal

The Secretary of State will be given power to reduce the upper limit on compensatory awards for unfair dismissal for claims brought after 29 July to the lower of:

  • 52 weeks’ pay; or

  • £74,200.

Pension contributions, benefits in kind and discretionary bonuses will be excluded from pay calculations.

Our view:

Very few employees are awarded more than 12 months’ pay for unfair dismissal but this may cause Claimants to take a more realistic view of the value of their claims.  To that extent, this change will help employers.