Employment law updates- February 2017

Please see below for our latest Employment law news updates:

  • The statutory rates for maternity, paternity, shared parental, adoption and sick pay will increase as follows from April 2017:

    • maternity pay will rise from £139.58 to £140.98 per week
    • statutory paternity pay, shared parental pay, and adoption pay will also rise from £139.58 to £140.98 per week
    • statutory sick pay will increase from £88.45 to £89.35 per week.
  • The Employment Rights (Increase of Limits) Order 2017 has been laid before Parliament and is set to increase compensation limits and minimum awards that are paid in accordance with employment legislation. These changes are due to take effect from 6 April 2017.

    The rates will only take effect in claims where the cause of action date, such as the termination date in an unfair dismissal claim, falls after 6 April 2017. The old limits will apply where the cause of action falls prior to 6 April 2017.

    The notable changes that will be made because of this statutory instrument include:

    • an increase to the limit on the maximum compensation awarded for unfair dismissal from £78,962 to £80,541
    • an increase in the limit on a week’s pay, which is used among other things to calculate statutory redundancy payments and the basic award for unfair dismissal, which is due to increase from £479 to £489
    • an increase to guarantee payments from £26 to £27 per day
    • an increase in the minimum basic award will increase from £5,853 to £5,970 in cases where a dismissal is unfair by virtue of health and safety, trade union, employee representative or occupational pension trustee reasons.
  • Since the new penalty regime for unpaid employment tribunal awards came into force on 6 April 2016, employers have cumulatively had to pay out more than £83,000 for failing to pay tribunal awards following judgement.

    The penalty gives the tribunal powers to penalise employers where they failed to pay awards following either tribunal judgement or settlement amounts made with the assistance of ACAS and COT3 agreements.

    Defaulting employers face a potential fine of 50% of the outstanding sum, subject to a minimum payment of £500, and a maximum of £5,000 following the issuing of a penalty notice.

    The penalty fee can be reduced by 50%if the employer pays both the relevant sum and the penalty within 14 days of receiving the penalty notice.

    Employment judges have not hesitated to exercise their new powers and employers should, therefore, ensure that these payments are made in good time if they wish to avoid additional unnecessary expense.

  • The Ministry of Justice (MoJ) published its review of the introduction of fees in the employment tribunals on 31 January 2017.

    The review concluded that the Government has broadly met the objectives for the introduction of the fees, which included:

    • users contributing between £8.5 million and £9 million a year in fee income, resulting in a transfer of a proportion of the cost from the taxpayer to those using the Tribunal
    • increased use of the ACAS free conciliation service
    • encouraging people to overcome disputes through ACAS’s conciliation service as opposed to taking claims to the Tribunal.

    There are, however, concerns about the effect of the introduction of the fee regime. In particular, the fall in claims is significantly greater than the Government had envisaged, and there is evidence to show that fees have discouraged potential claimants from bringing proceedings. Despite this, the MoJ is maintaining its position that the introduction of fees has not prevented people from lodging claims or restricted their access to justice.

    The MoJ has, however, introduced fee exemptions in respect of a very small number of claims related to payments made from the National Insurance fund such as claims for redundancy payments.

    The Supreme Court’s hearing on the UNISON judicial review of tribunal fees, R (UNISON) v Lord Chancellor, is listed for 27 and 28 March 2017 and it will be interesting to see whether the Supreme Court agrees with the MoJ’s position.

  • The Women and Equalities Committee report revealed that 77% of women surveyed reported at least one potentially discriminatory or negative experience. In addition, Sue Coe of the Equality and Human Rights Commission reported that 55% of companies provide no training to managers on how to effectively manage pregnancy or maternity in the workplace. The report showed that urgent action and leadership was required and set out 21 recommendations.

    The Government has now published its response to these recommendations, a copy of which can be found here.

    Although most of the recommendations were rejected, the Government has stated that:

    • the possibility of extending maternity related rights, including the right to paid time off for ante-natal appointments for workers will be considered in the Taylor Review into employment practices which MP Matthew Taylor is leading
    • it will consider further and bring forward proposals to ensure that sufficient protections from redundancy are in place for those who are pregnant or returning from maternity leave
    • Brexit will not lead to the diminution of employment rights, including rights of pregnant women and new mothers
  • Records of investigatory meetings carried out by lawyers will not necessarily be protected by legal advice privilege.

    In the case of Re the RBS Rights Issue Litigation 2016, it was held by the High Court that if a company’s lawyers interview employees as part of an employer’s internal investigation, legal advice privilege cannot be exercised to protect the contents of the interview due to the fact that the employees could not be deemed to be clients of the company’s lawyers.

    Employers should be mindful of the fact that where lawyers are instructed to undertake investigations, legal advice privilege does not extend to information provided by employees and ex-employees to, or for the purpose of, being placed before a lawyer, and their notes can still be disclosed for the purposes of conducting a fair investigation.

  • On 1 February 2017, S.41 of the Enterprise Act 2016 came into force which introduces the power to cap public sector exit payments at£95,000.

    The cap is intended to apply before tax and will include the following “qualifying exit payments” made to employees or office holders of prescribed public sector authorities:

    • redundancy payments
    • payments on voluntary exit
    • severance payments or other ex gratia payments
    • payments in respect of outstanding contractual entitlements
    • compensation payable under a contractual term
    • payment in lieu of notice
    • payment in the form of shares or share options.