What UK Employers Need To Know: Staying Ahead In 2012

AT A GLANCE

We outline the key forthcoming and recent legislative developments in UK employment law for 2012 and summarize the new rates and limits. We also take a look at what is on the horizon so you can stay ahead and we identify the key employment cases due before the European court, the UK courts and the employment tribunals this year.

  1. KEY EMPLOYMENT LAW CHANGES, RATES & LIMITS

    February

    1. Unfair dismissal basic and compensatory award and statutory redundancy payment increases1

      On 1 February, the limit on a week's pay for calculating statutory redundancy and the basic award for unfair dismissal increased from £400 to £430 and the maximum compensatory award for unfair dismissal increased from £68,400 to £72,300. However, no maximum applies in certain circumstances, for example where the dismissal is for making a protected disclosure. The new maximum statutory redundancy pay is £12,900.

      March

    2. Parental leave increases from three to four months

      Although a new EU Directive on Parental Leave Directive (2010/18/EU) comes into force on 8 March 2012 giving birth and adoptive parents the statutory right to four rather than three months leave, the Government has confirmed that it will rely on the exception that allows member states an extra year for implementation, and that it will implement the change by March 2013.

      April

    3. Qualifying period for unfair dismissal increases to two years

      At present, employees need one year's continuous service to bring a claim of unfair dismissal against their employer (the "qualifying period"). On 6 April, the qualifying period will increase from one year to two years. The change will apply only to employees who start a new job on or after 6 April. Those who are already in employment before that date will retain the current one-year qualifying period.

    4. Changes to tribunal procedure come into force

      It costs employers a substantial amount each year to defend unmeritorious claims to the tribunal by current and former employees. In an attempt to combat the more spurious claims, the Government has announced changes to certain tribunal procedure. From 6 April, the maximum amount of a deposit order, which a tribunal can order a party to pay as a condition to continuing with tribunal proceedings, increases from £500 to £1,000. The maximum amount of a costs order, which a tribunal may award in favour of a legally represented party, increases from £10,000 to £20,0002. It remains to be seen if the tribunal exercises these powers.

    5. New statutory payment rates

      From 1 April, the standard rate of statutory maternity, paternity and adoption pay increases from £128.73 to £135.45 per week. From 6 April, the standard rate of statutory sick pay increases from £81.60 to £85.85 per week.

      October

    6. Automatic enrolment comes into force

      All employers in Great Britain will be required to automatically enroll eligible jobholders into a pension scheme. The new duties will be formally implemented over four years starting on 1 October, with larger employers being affected before smaller employers and new businesses. The initial wave of employers will be able to voluntarily start auto-enrolment as early as July.

    7. Increases to national minimum wage

      Although no rates have been published yet, these are expected to increase in the normal way as of 1 October.

  2. KEY CONSULTATIONS

    In 2011 it was difficult to avoid the vast number of consultations and calls for evidence published by the Government. Below, we touch upon those which we anticipate will have the most significant effect in 2012 and the issues still being considered.

    1. Resolving workplace disputes: a consultation: Government's response

      On 27 January 2011, the Department for Business...

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