UK Employment Law Update, Summer 2013

Welcome to the latest issue of the Steptoe Employment Law Update.

The Employment Law Updates are aimed at providing snapshot information on recent developments in UK employment law and also a brief practical insight in managing workplace issues on a proactive basis.

1. ALL CHANGE - EMPLOYMENT LAW REFORM

   Fees for employment tribunal and employment appeal tribunal claims are now in force with effect from 29 July 2013 for all new claims. Tribunal fees will be charged in two stages, the first at the issue of the claim and the second prior to the Hearing. The introduction of fees is currently the subject of a judicial review challenge by Unison, which Hearing will take place in October 2013. The Government has recently published a factsheet giving guidance on fees. Click here for factsheet. The Issue and Hearing fees of £250 and £950 respectively for ordinary detriment/dismissal claims are payable by the Claimant but with a remission scheme in place for those who cannot afford the fee, a Respondent employer may not be aware that a claim has been issued for some time after the limitation period has expired. The Tribunal will reject a claim if it is not accompanied by a Tribunal fee or a remission application. If the Claimant does not pay the relevant fee by the specified date, the claim will be dismissed without further order. This could leave a Respondent unaware that the Hearing will not be effective creating considerable uncertainty. The fee for judicial mediation is now £600 and is payable by the Respondent employer. There is no provision for the Tribunal to refund the fee once it is paid. However, if a claim is settled before the Hearing the Respondent employer may end up being asked to pay for the fees paid as part of a compensation package. New rules are also in place for the revised Tribunal procedure with effect from 29 July 2013. Among other changes the new rules combine case management discussions and pre-hearing reviews into one preliminary hearing and introduce an initial paper sift. A new ET1 Claim Form is also introduced. The overriding objective remains that parties are on an equal footing, cases are dealt with proportionately to the complexity and importance of the issues, avoid unnecessary formalities, delays and save expense. With the new initial sift stage, an employment Judge will automatically review every case on paper once the claim and response forms have been submitted. Cases which have no reasonable prospect of success will be struck out, subject to an appeal. Case management directions will then be given if the claim is to proceed. The Respondent will now be able to apply for an extension of time either before or after the original 28 day deadline for filing the ET3. The draft ET3 should accompany any application for an extension where the deadline has passed. Another significant change relates to unfair dismissal and the new cap on the compensatory award. For dismissals after 29 July 2013, the statutory limit on compensation is the lower of £74,200 (reviewed annually) or 52 x a week's pay of the Claimant, i.e. 1 year's salary. This may have a significant effect on the number of claims when coupled with the new costs regime for prospective Claimants. Claims may fall by as much as 25%. Compromise Agreements are renamed Settlement Agreements with effect from 29 July 2013. From that date employers and employees will be able to enter into confidential discussions about termination of employment which will be inadmissible thereafter in ordinary unfair dismissal claims. ACAS has produced a statutory Code of Practice on settlement agreements, available from here, and a Guide to Settlement Agreements. This pre-termination negotiation can be initiated by either the employer or the employee as a means to ending the employment relationship before any formal dispute has arisen. If a settlement is not agreed, an employee may still bring a claim but he or she will not be entitled to include evidence about the termination discussions in the claim. Under the Code, as a general rule a minimum of 10 days should be allowed to the parties to consider the terms of agreement and to receive independent advice unless the parties agree otherwise. The protection from disclosure is limited to normal unfair dismissal claims and it will not apply to discrimination, whistleblowing or contract claims. Discussions will be discloseable if there has been any improper behaviour by either party such as bullying or undue pressure on the party during the discussions to accept the terms of settlement. Interest on unpaid employment tribunal awards at 0.5% accrue from the day after the relevant decision day with effect from 29 July 2013 but no interest will be payable if the full amount of the award is paid within 14 days of the relevant decision day. Interest on unpaid discrimination awards for claims brought after 28 July 2013 has risen up from 0.5% to 8%. 2. EMPLOYEE SHAREHOLDER STATUS

   This new type of employment status whereby employees give up some of their important employee rights in exchange for an award of shares worth at least £2,000 comes into effect on 1 September 2013. There are very detailed and complex tax requirements to be satisfied if the employee is to be given this special status. The Company is required to provide a written statement of the particulars of the status of the employee shareholder. The employee must obtain advice from an independent adviser as to the terms and effect of the written statement and there is a cooling off period of 7 days. The Company must also pay the reasonable costs of the employee in obtaining advice whether or not the employee becomes an employee shareholder. Apart from the complex tax issues, a number of significant issues remain unclear, such as buy back, forfeiture and leaver provisions so the practicality of this new status option may deter all but the most experienced employers.

3. DIRECTORS' PAY

   The Government has published regulations setting out the information which should be included in the directors' remuneration report with effect from 1 October 2013. The remuneration report which the directors of a quoted company are required to prepare under the Companies Act 2006 should include a single total figure table of remuneration in respect of each person who was a director during the relevant financial year, payments made to directors for loss of office and a performance graph which sets out the total shareholder return of the company on equity share capital.

4. MANDATORY EARLY CONCILIATION

   The Government has responded to the consultation on early conciliation which is intended to be introduced in April 2014. It has decided to impose a duty on the parties and ACAS to attempt early conciliation of employment disputes before most tribunal claims are issued. This will require individuals bringing a claim to first notify ACAS through an online form. This means conciliation will come at the beginning of the litigation process before costs begin to escalate. ACAS has secured funding ahead of the employment law changes to enable their participation. Prospective Claimants will remain responsible for ensuring they present claims to a Tribunal within the relevant statutory time limits. As the proposed rules of procedure will require Claimants to include the conciliation reference number given to them by ACAS on their ET1 form to demonstrate compliance with the requirement for early conciliation, if this is not done, the Tribunal will dismiss the claim. This reform may also have a significant impact on future claims made to a Tribunal after a failure to settle matters mutually.

5. DATA PROTECTION AND SUBJECT ACCESS REQUESTS

   The Information Commissioner's Office has published new guidance for organisations to help them deal with requests for individuals for their data.

   Under the Data Protection Act anyone has the right to find out what information an organisation holds about them by making subject access requests. Once received an organisation normally has 40 days to reply to the request. As part of the launch of the publication of the new code of practice the Information Commissioner's Office has published 10 simple steps which organisations should consider when responding to subject access requests:

   Identify whether a request should be considered as a subject access request Make sure there is enough information to be sure of the requester's identity If more information is needed from the requester to find out what they want, then ask at an early stage If a fee is to be charged, ask for it promptly Check whether the information the requester wants is available Do not be tempted to make changes to the records, even if they are inaccurate or embarrassing But do consider whether the records contain information about other people Consider whether any of the exemptions apply If the information includes complex terms or codes, then make sure these are explained Provide the response in a permanent form, where appropriate. The code is available here.

6. CASTE LEGISLATION

   The Government has published a timetable for introducing caste legislation under the Equality Act 2010. Caste will be included within the definition of the protected characteristic of "race". A public consultation is planned for spring 2014 with a final draft order to be introduced during the summer of 2015.

7. WORK EXPERIENCE AND HEALTH AND SAFETY

   The Government has reduced and simplified health and safety requirements for young people being taken on as work experience students by employers. The Health & Safety Executive has issued revised guidance to employers on placements for young people. Employers do not have to take out special insurance policies to cover students on work experience and making it clearer and easier for employers and work experience organisers to check appropriate measures are in place. Employers with fewer than 5 employees do not need a written risk assessment and repeat assessments are...