Changes to UK employment law after April 6 2012

 

Unemployment rates have been rising recently due to the ongoing financial crisis. The Government believes that part of the problem is that employers are reluctant to take on new employees due to the complexity of employment law. Consequently, they have brought in a raft of reforms that came into effect on April 6, 2012.

Qualifying Period

The most significant change is to the ‘qualifying period’.

Before, employees must have served a full 12 months before they were entitled to bring an unfair dismissal claim. This meant that if an employer terminated a contract inside this period, the employee’s only recourse was to ‘wrongful dismissal’; a contractual claim for money to cover their notice period. This, for many people, will be very low, as little as a week’s wages.

  • From April 6 2012 the qualifying period was extended to two years. The Government expects the change to encourage small businesses to take on new employees, but not everyone is in agreement

The Trades Union Congress has criticised the move, saying that it will lead to an increasingly ‘hire and fire’ workplace culture. However, current employees need not worry. The goal is to increase new employment and the changes have not been made retrospective: they will not apply to current employees.

Other Changes

There are further changes. Increases have been made to:

  • Maternity pay
  • Paternity pay
  • Adoption pay
  • Sick pay

The amount the Employment Tribunal can award in costs to the winning side has also increased. However, costs orders are rare in the Employment Tribunal and are only awarded if one side conducts themselves exceptionally poorly. Nonetheless, the Government hopes that increasing the maximum award to £20,000 will help to ensure that the tribunal process is not abused.

It is not all controversy - the Government has also clarified a technical question about compromise agreements. Following a tribunal case in 2010, there was some confusion over whether the ‘independent advisor’ on a compromise agreement could be a solicitor who themselves acts for the employee. The Quality Act 2010 (Amendment) Order 2012 has cleared this up and confirmed that it is permissible to use the same solicitor.

Businesses and trade unions will be keeping a close eye on these developments and will doubtless make their feelings known once they start to take effect. If a new reform has affected the daily running of your business, it is recommended to seek legal advice to ensure you are aware of your liabilities.

For more information on the current law on employment, see our guidance page on employment law.

Are you affected by the new law reforms and unsure if you have a case for unfair dismissal? Caven can recommend a specialist employment solicitor to try to resolve the dispute for you at a tribunal, or outside of tribunal if your length of service is too short. Please call us on 08001 221 2299 or complete the web-form above.

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