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Need to know employment law update (April 2014)

Jo Eccles, Business Adviser at the Forum of Private Business, provides a need-to-know summary of the key employment law changes small business owners should have on their radar from this month and key developments on the horizon. 

From 6 April, the first of the government's common commencement dates for several key changes to workplace legislation are due to come into force.

These are:

Changes to statutory sick pay, maternity and redundancy pay

As of 6 April the statutory sick pay rate increases from £86.70 to £87.55. Maternity pay, ordinary, additional paternity and adoption pay increases from £136.78 to £138.18. The maximum amount of a week's pay for calculating statutory redundancy pay will also change to £464 and the new maximum redundancy payment will be £13,920.

Sickness pay

The DWP has abolished the statutory sick pay (SSP) percentage threshold scheme (PTS) from the beginning of the 2014/15 tax year.
 
The PTS compensates employers for higher-than-average sickness absence. An employer is entitled to recover some of the SSP paid to their employees if the total SSP paid in a tax month is greater than a set percentage of their gross Class 1 NICs (employers' and employees') liability for that month.
  • Employers will have until the end of 2015/16 to recover SSP paid for sickness absences occurring before the end of 2013/14
  • The associated SSP record-keeping requirements will have also been abolished from the beginning of the 2014/15 tax year. Employers will, however, still be required to maintain records for PAYE purposes and to demonstrate they are meeting their SSP obligations.

The PTS has been abolished because an independent review of sickness absence showed that it has not encouraged employers to manage sickness absence in the workplace.

As a result, the Government has decided to abolish the scheme and reinvest the money in a new Health and Work Service which is set to be operational by the end of this year. This aims to provide an alternative form of support that will benefit employers by enabling employees on sickness absence to return to work (where possible) more quickly and by assisting employers to manage sickness absence better. We will provide further updates on this as soon as more information becomes available.

Employment tribunal changes

A significant tribunal development we highlighted last year was the introduction of fees for employees wishing to make a claim against an employer.

From the 6 April 2014 further changes will include:

  • The abolition of discrimination questionnaires. These allowed claimants to serve these on individuals that they believed had discriminated against them prior to bringing a claim or within a limited period thereafter, to enable a claimant to better understand whether they had a claim for discrimination. However a claimant will still be able to seek such information as part of the tribunal process.
  • From 6 April 2014, a new system will come into place which requires claimants, before bringing a claim, to send details of that claim to ACAS and they will then be offered pre-claim conciliation for a period of one month. If the parties enter into pre-claim conciliation then this will have the effect of stopping the clock for the presentation of a Tribunal claim for the period of the pre-claim conciliation. If either party refuses to partake in the pre-claim conciliation or if the conciliation is unsuccessful then the claimant may present their claim to the Tribunal.
  • From April an employer could face an additional financial cost beyond that of any compensation awarded to the individual. A financial penalty is to be introduced to the tribunal system and will be applied against a losing employer where the employer's breach has 'one or more aggravating features'. The penalty is not payable to the claimant but rather the Secretary of State with a 50% discount for payment within 21 days. The penalty must be 50% of the amount of any financial award ordered by the Tribunal to the claimant but is subject to a minimum and maximum penalty figure being £100 and £5000 respectively.
  • Changes to limits on tribunal payments and awards also come into force from April.
On the horizon - key developments to watch out for in the coming months

Flexible working

From 30 June 2014 employers could find themselves receiving flexible working requests from any employee, when the right to request flexible working is extended to all employees who have 26 weeks continuous service. At the same time the procedure for dealing with such requests will be more relaxed as the statutory procedure of dealing with these type of requests will no longer apply and instead an employer must deal with any request in a reasonable manner.

Changes to the National Minimum Wage

Following plenty of discussion in the headlines in the past few months the new rates for the National Minimum Wage have been agreed and will come into effect from October 2014. It is definitely worth flagging this up in your diary particularly with the introduction of stiffer penalties of up to £20,000 earlier this year.

The new rates will be:

21 years and over - £6.50 per hour
18-20 years - £5.13 per hour
16-17 years - £3.79 per hour
Apprentice rate - £2.73 per hour

Shared parental leave

Shared parental leave is due to be introduced in April 2015 and is designed to allow parents to share care for the child in the first year from the date of the child's birth.

In essence both parents will be able to take shared parental leave and claim shared parental pay after the compulsory two week maternity leave period. Before taking a block of leave (an employee can make up to three requests to take leave), an employee will have to provide the employer with 8 weeks notice. The scheme will also provide each employee taking shared parental leave with 20 KIT style days. Further, provided that the employee has not taken more than 26 weeks shared parental leave, he/she will retain the right to return to the same job.

As with any employment law related issues it is worth seeking advice from an expert before deciding to take any action. Don't forget that forum members can contact our business advice team for further information and advice on a range of business issues including employment law. For further information call 0845 130 1722.

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