Latest Employment Legislation – February 2012

February 2012

Latest changes in employment legislation.

Service Qualification to Claim Unfair Dismissal to Increase

The Government has confirmed that the qualifying period for unfair dismissal claims will increase from 1 to 2 years’ service on 1st April 2012 and will only apply to employees who start new employment on or after 6th April 2012. The current one-year qualifying period will continue to apply to employees who started their employment before 6th April 2012.

From April 2013, claimants will also be required to pay a fee to lodge a claim and then a further fee if a hearing is granted with fees being refunded where claims succeed. The aim of these measures is to reduce the number of “vexatious” claims being made and the Government believes that the introduction of fees, together with the increase in the qualifying period, will result in 2,000 fewer tribunals each year. The Ministry of Justice is expected to publish a consultation on the introduction of fees for tribunal claims. 

The Government has said that “poor” claimants will not have to pay, although there is currently no detail as to what qualifies as “poor”. Cynics have pointed out that if “poor” is “unemployed” then, since most claimants are unemployed, very few people will have to pay – although the tribunal system will have to deal with a large administrative burden of processing fees, and repaying these to successful claimants.

Unfair Dismissal – Maximum Compensatory Award Increase

The maximum compensatory award for unfair dismissal has increased from £68,400 to £72,300 where the effective date of termination occured on or after 1st February 2012. 

Redundancy Costs Increase

The cap on a week’s pay for statutory redundancy pay has increased on 1st February 2012:

  • The cap on a week’s pay (used to calculate Statutory Redundancy Pay and the Basic Award for Unfair Dismissal for those earning in excess of the cap) increases from £400 to £430.

The maximum statutory redundancy payment therefore increases from £12,000 to £12,900.

Maternity, Paternity & Adoption Pay Rates to Increase

Standard rates of statutory maternity pay (SMP), paternity pay (SPP) and adoption pay (SAP) will increase from £128.73 per week to £135.45 per week from April 2012.

Statutory Sick Pay Rate to Increase

From 6th April 2012, the weekly rate at which Statutory Sick Pay (SSP) is payable will increase from £81.60 to £85.85.

Lower Earnings Limit for National Insurance Contributions to Increase

From 6th April 2012, the lower earnings limit for primary Class 1 national insurance contributions will increase from £102 to £107.