HR Latest News Update

For all the latest in changes in UK and European Employment Legislation and HR news bookmark this page.

January 2010

Unfair Dismissal – Maximum Compensatory Award to Decrease

The maximum compensatory award for unfair dismissal decreases from £66,200 to £65,300 where the effective date of termination occurs on or after 1st February 2010. The decrease reflects a reduction of 1.4 per cent in the Retail Prices Index for the 12 month period up to September 2009.

Maternity, Paternity and Adoption Pay Rate to Increase

Standard rates of statutory maternity pay (SMP), paternity pay (SPP) and adoption pay (SAP) will increase from £123.06 to £124.88 per week from 4th April 2010.

Statutory Sick Pay Rate Unchanged

Statutory Sick Pay, which normally increases on or around 6th April each year will not be increased this April. The weekly rate of SSP remains as £79.15 per week.

Statutory Sick Pay Rate Unchanged

Under the Work & Families Act, fathers will be able to benefit from up to 26 weeks' additional paternity leave if the mother of the child returns to work before the end of the maternity leave period to which she is entitled. This will be available during the second six months of the child's life and may be paid if taken during the mother's statutory maternity pay period. The Government intends that the legislation will be enforced April 2010 and will apply to parents of babies born from 3rd April 2011.

December 2009

Right to Request Time off for Training to be Introduced

Under the Apprenticeships, Skills, Children & Learning Act 2009,the right to request time off to undertake training, modelled on the right to request flexible working is to be introduced. Employers will be obliged to consider seriously requests that they receive, but will be able to refuse a request where there is a good business reason for doing so. Employers will not be obliged to meet the salary or training costs to enable a request for time off to train to be met. The Government intends to introduce the right to time off to train for employees with 26 weeks’ service in organisations with 250 or more employees in April 2010, with the legislation being extended to cover all employees from April 2011 at the earliest.

GP Medical Certificates to Change

Under the Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) Amendment Regulations 2010 that come into force in April 2010, the current sick notes used by GPs will be replaced with a 'fit note' system. They change the format of the medical statement to allow doctors to record whether a patient is 'fit' or 'not fit for work' but also include a new option to allow a doctor to indicate where someone may be 'fit for some work now'. GPs will also be able to issue statements printed by their practice's computer systems as opposed to handwriting on a statement pad as is currently the case.

Government Delays Agency Workers Directive

The Government has delayed the introduction of the Agency Workers Directive (AWD) until October 2011 the purpose of which is to provide temporary staff provided by Agencies with the same employment rights as permanent staff after 12 weeks' work, including pay.

October 2009

Holiday Sickness - Major New Ruling

The European Court of Justice (EJC) has ruled that employees can postpone holiday if they become sick whilst on holiday. The ruling allows employees who are ill immediately before or during a holiday should be allowed to take that holiday later in the year, or carry it forward into the next holiday year if necessary. This follows on from a recent decision in HMRC v Stringer that statutory annual leave both accrues and can be taken during sickness absence. As a result of this ruling, employers will need to revise their holiday, sickness absence and disciplinary procedures.

Extension to Paternity Rights to Proceed

In our previous update on this topic we reported that plans to give fathers six months’ paternity leave had been suspended. This has now changed and the Government is now consulting on new Regulations for parents of children due on or after 3 April 2011. Under the planned Regulations:

1. Mothers will have the choice to transfer up to six months leave to fathers should they want to, which can be taken by fathers after the mother has returned to work.
2. The new provision will be available during the second six months of a child’s life providing parents the option of dividing a period of paid leave entitlement between them.
3. Some of the leave may be paid if taken during the mother’s 39 week maternity pay period. This would be paid at the same rate as Statutory Maternity Pay (currently £123.06) and;
4. Parents will be required to ‘self certify’ by providing details of their eligibility to their employer.  

Employed fathers are currently entitled to two weeks paid paternity leave and mothers to 52 weeks maternity leave, of which up to 39 weeks are paid. Employed parents are also entitled to a total of 13 weeks unpaid parental leave until the child’s fifth birthday. Parents of children aged 16 and under have the right to request flexible working. These rights will not be affected by the introduction of additional paternity leave.

Default Retirement Age to Stay (for time being)

On 25th September, the High Court ruled that the UK’s default retirement age (DRA) is justified which allows employers to force employees to retire at 65 with no risk of discrimination litigation and legally refuse to recruit anyone over 65. Despite this, the Government has indicated its intention to bring forward its review of the DRA to 2010 and may consider increasing the DRA to 68 or 70 or abolishing it altogether.  In the meantime, the DRA faces further legal challenge.

September 2009

Childcare Vouchers to Lose National Insurance Exemption

The Government has announced that it will remove the tax and national insurance contribution exemptions for childcare vouchers provided by employers from April 2011. Existing recipients of Childcare vouchers will be unaffected until April 2015 when the exemptions for vouchers will be withdrawn completely.

Tips and the National Minimum Wage

Following a Court of Appeal decision earlier this year, the effect of tips (and other gratuities) when calculating the minimum wage changed on 1st October. Tips (including service charges and other gratuities) can no longer be included in calculating the National Minimum Wage. This amendment has been introduced via regulation 5 of the National Minimum Wage Regulations 1999 (Amendment) Regulations 2009

August 2009

Extension to Paternity Leave Rights Suspended

Plans to give fathers six months paternity leave have been suspended by the government to help employers during the recession. The proposal originally announced in 2005 was due set to be introduced this year to allow mothers and fathers to share one year of parental leave, with fathers able to take six months’ leave after the mother's first six months. A new date for extending paternity rights has not yet been set. Under current legislation, fathers can take either one or two weeks’ paternity leave, providing they meet specified conditions.

Extended Statutory Maternity Pay Suspended 

Plans to extend statutory maternity pay or SMP from 39 to 52 weeks have been suspended as a result of the current recession. The Government’s previously stated aim was to extend statutory maternity pay, maternity allowance and statutory adoption pay alongside the introduction of additional paternity leave and pay referred to above but it has yet to announce a date for extending maternity rights.

July 2009

Long-term Sickness & Holiday Pay

Following the HM Revenue & Customs v Stringer case, the House of Lords following referral to the European Court of Justice has determined that employees including those on long-term sick leave who have a claim for unpaid annual leave under the Working Time Regulations 1998 are entitled to bring claims before an employment tribunal not only under these Regulations 1998, but also under section 13 of the Employment Rights Act 1996, which provides employees with the right not to have unlawful deductions made from their salaries.

Two employees were involved, one on indefinite sick leave who asked to take a number of days' paid annual leave; the other was dismissed whilst on long-term sick leave. Since they had not taken their paid annual leave during the relevant leave year, they claimed payment in lieu of their accrued and untaken holidays.

The EJC concluded that the right to paid annual leave continues to accrue during sick leave and on termination of the employment relationship, an employee who has been on sick leave and unable to take paid annual leave is entitled to a payment in lieu.

Right to Request Time of Work for Training

A new right to request time off to undertake training is to be introduced which is to be modelled on the current right to request flexible working which will be available to employees that have been continuously employed for at least 26 weeks.

Employees will be able to request any training that will help them to be more productive and effective at work, and help their employer to improve productivity and business performance and will be allowed to make one request in any 12 month period.

Employers will be obliged to consider any requests made but will be able to do so provided there are good business reasons for doing so. There will be no obligation on employer to fund such requests. These rights are to be included in the Apprenticeships, Skills, Children and Learning Bill, which having passed through the House of Commons is currently being debated in the House of Lords. An implementation date has not been set yet

June 2009

Redundancy Pay to Increase

In the Budget on 22 April 2009, the Government announced a ‘one off’ increase in the maximum week's pay that can be taken into account when calculating a statutory redundancy payment from £350 to £380. The maximum statutory redundancy payment that an employee can receive will increase from £10,500 to £11,400. This increase is expected to come into force on 1st October 2009.

Worker Registration Scheme Extended

The Government has announced that the Worker Registration Scheme which was due to finish on 30th April 2009 has been extended for another 2 years.

Under the scheme citizens of the following countries have to register if they wish to work for an employer in the United Kingdom for more than one month - Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia.  Failure to apply with one month of commencing work, employment will be deemed illegal from that date.  Successful applicants will receive a Registration Card and Registration Certificate.

Employers are required to provide evidence to support an application to register on the Scheme; failure to ensure that employees comply with the requirements of the Workers Registration Scheme may be subject to a £5,000 fine.

48 Hour Opt Out to Remain

There has been no agreement on the issue of Britain’s ability to opt out of the 48 hour week.  As a result, employees will be able to continue to work more than 48 hours a week if they choose to do so.

TUPE Regulations Amended

The Transfer of Undertakings (Protection of Employment) (Amendment) Regulations th

at came into force on 6th April 2009 result from the repeal of the statutory dispute resolution procedures. The TUPE Regulations 2006 require the transferor to supply information about employees including information about any disciplinary procedure taken against, or any grievance claim made by an employee within the preceding two years in circumstances where statutory dispute resolution procedures apply as set out in the Employment Act 2002 (Dispute Resolution) Regulations 2004.  The effect of these Regulations is that the transferor is now required to provide information in circumstances where the new ACAS Code of Practice on disciplinary and grievance procedures applies, rather than the statutory dispute resolution procedures apply.

Minimum Wage Rate to Increase

With effect from 1st October 2009, National Minimum Wage Rates increase as follows:

The main adult rate will increase from £5.73 to £5.80 per hour

The rate for 18 to 21 year olds will increase from £4.77 to £4.84

The rate for 16 to 17 year olds will increase from £3.53 to £.57

The Government has also signalled its intention to ban employers from using tips to bring employees’ wages up to national minimum wage levels from October.

May 2009

New Equality Bill

The Government's Equality Bill has been published and is expected to come into force in October 2010.  The aim of the Bill is to combine all existing legislation on discrimination into a single statute which is expected to contain 205 clauses and 28 Schedules. The main features of the Bill are summarised below although changes and new provisions may yet be introduced.

• Positive action in recruitment/promotion decisions - The Bill will allow employers to positively discriminate during recruitment in favour of disadvantaged groups when choosing between candidates who are otherwise equally qualified. Such decisions will need to be made on a case by case basis, as opposed to having a blanket policy of positive action. This will be problematic for employers who use positive action will be exposed to discrimination claims from unsuccessful candidates who may challenge whether candidates are truly equal, as well as the assessments of under representation and disadvantage.

• Discrimination by association or perception - Discrimination on the grounds that someone is 'perceived' to possess a protected characteristic will become unlawful as will discrimination or harassment of an individual associated with someone who has a disability, or is of a particular age, sex, sexual orientation, racial origin or religion or belief. 

• Disability discrimination - The current list of impairments that qualify as disablement (mobility, manual dexterity, physical coordination, continence, speech, hearing or eyesight, ability to lift, carry or otherwise move everyday objects, memory or ability to concentrate, learn or understand  and perception of the risk of physical danger. Will be changed to a general requirement that an impairment is long term (12 months or more) and has a substantial effect on a person's ability to carry out normal day-to-day activities.

• Age discrimination by service providers – Who will be prohibited from discriminating against customers, clients and other service users on grounds of age, although there may be some exemptions may be allowed.

• Equal pay and pay transparency - Some clarification of the law is expected in this area and it is expected that the Secretary of State will be able to order private sector employers with at least 250 employees to publish information about differences in pay between their male and female employees at some point after 2010.  Clauses in employment contracts that seek to prevent employees from discussing their salaries will be outlawed.

Other areas within the Bill relate to public sector equality duties and the requirement for businesses bidding for public sector contracts to provide evidence their 'diversity credentials' and for employment tribunals to have greater powers to make recommendations in proven unlawful discrimination cases including introducing an equal opportunities policy, re-training staff or publicising selection criteria.

April 2009

New ACAS Code on Disciplinary & Grievance Procedures

The new ACAS Code of Practice on Disciplinary & Grievance Procedures comes into force on 6th April 2009 when the current statutory dismissal and grievance procedures are abolished by the Employment Act 2008 and applies to all employees irrespective of their size.

Employees will no longer be barred from lodging a claim without first raising a grievance or appealing against dismissal and a failure by an employer to follow the new Code will no longer result in a finding of automatic unfair dismissal as is currently the case. However, unreasonable failure by an employer to follow the new Code will enable an Employment Tribunal to increase or decrease any compensation award made by up to 25%.

The procedures proposed by the new Code remains broadly similar in that the basic 3-step procedure of setting out the allegations in writing, holding a meeting and offering the right of appeal is retained. An important point to note is that the new Code does not apply to redundancies or the termination of fixed term contracts.

Transitional arrangements are in place to address disciplinary events, dismissals and grievances that were ‘triggered’ or started before 6th April 2009; in these cases the old rules will continue to apply and there will be a 3 month extension to the time limit in which a claim must be presented. Any such claims will be assessed throughout the case against the pre-6th April 2009 regime with the formal three step procedure, adjustments for procedural unfairness in the 10 - 50% range and automatic unfair dismissal for non-compliance with the statutory procedures.

Right to request flexible working to be extended
Flexible working request rights are extended in April to all parents of children up to the age of 16 (or disabled children under the age of 18) or who have adult dependents. Employees must have at least 26 weeks' continuous service with their employer in order to qualify and employers still retain the ability to refuse such requests.

 The statutory holiday entitlement is increasing again. The holiday entitlement increased to 4.8 weeks from 1st October 2007 and increases to 5.6 weeks from 1st April 2009 (pro rata for part-timers).  The holiday entitlement can include bank and public holidays where required by employers.  Note that where employees receive paid time off for bank and public holidays in addition to four weeks’ holiday entitlement, the holiday entitlement has not increased.

Additional restrictions on appointing foreign workers

From 1st April employers seeking candidates from outside the EU must advertise skilled vacancies (Tier 2 jobs e.g. in engineering, IT and construction) through JobCentre Plus for at least 2 weeks.  Currently, employers must advertise job vacancies in the UK for 2 weeks before advertising overseas.   Employers will receive letters confirming their advert and allowing them to apply for certificates of sponsorship with the UK Borders Agency, enabling them to hire non-EU staff. Employers breaking the new rules could have their licence to employ non-EU migrants revoked and be fined up to £10,000 for each illegal employee.

As from 1st April, Tier 1 highly skilled workers will require a master's degree (previously a Bachelor’s Degree) and receive an annual salary of at least £20,000.   The Tier 3 (temporary shortage areas) has already been suspended to ensure no foreign national from outside the EEA can come to the UK and work in a low-skilled job.

March 2009

Maternity, Adoption & Paternity Pay Rates to Increase

The amount of Statutory Maternity Pay (SMP) payable to an employee for payment weeks starting on or after Sunday 5th April 2009 is a maximum of 39 weeks as follows:

• First six weeks of payment - 90% per cent of the employee's Average Weekly Earnings with no upper limit.
• Up to 33 weeks’ pay at the standard rate which increases from £117.18 to £123.06 a week or at 90% of the employee’s average weekly earnings where the employee is paid less than £123.06 per week. 

The weekly rate of Statutory Paternity Pay (SPP) and Statutory Adoption Pay (SAP) for payments starting on or after 5th April 2009 increases from £117.18 to £123.06 or at 90% of the employee’s average weekly earnings where the employee is paid less than £123.06 per week.

Health & Safety Offences Act 2008

Without much fanfare, The Health & Safety Offences Act 2008 came into force in January which increased penalties and provides courts with greater sentencing powers for individuals infringing health and safety law.  In future, breaches of regulations become criminal matters and the power of lower courts to impose fines increases from £5,000 to £20,000 for health and safety offences; imprisonment also becomes an option for more health and safety offences in both the lower and higher courts.

The new penalties in the Act are not retrospective and will not apply to offences committed before 16th January 2009.    Employers need to take a systematic approach and ensure risk assessments are carried out and proper procedures are in place to minimise risk.

February 2009

Right to request flexible working to be extended
The Government has confirmed that the right to request flexible working will be extended in April 2009 to parents of children up to the age of 16. Currently only those with children under the age of six (or disabled children under the age of 18) or who have adult dependants are able to make flexible working requests.

Employees must have at least 26 weeks' continuous service with their employer in order to qualify. Employers will be able to refuse the requests.

January 2009

Lower Earnings Limit

 The Lower Earnings limit for 2009-2010 increases from £90 to £95 per week.

Statutory Sick Pay Rate to Increase

 From 6th April 2009, the standard rate Statutory Sick Pay (SSP) increases from £75.40 to £79.15 per week.

Whilst we take great care in the compilation of our briefings to ensure accuracy, we do not in any circumstances accept responsibility for any errors, omissions or advice given in this publication