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Enterprise and Regulatory Reform Bill 
 
This Bill, which entered the 'Report Stage' of the House of Lords at the end of February and from where further amendments are expected, before it continues its progression to through to Royal Assent, some time in the early part of 2013, though a final implementation date is not yet known. 
As a reminder, the Enterprise and Regulatory Reform Bill will: - 
Implement various reforms to the Employment Tribunal System including: - 
Requiring perspective claimants in dispute with their employers to send information to ACAS to attempt to reach a settlement before submitting their claim. The information they will be required to submit will be clearly prescribed. 
Allow for certain claims to be heard by ‘Legal Officers’ with the agreement of both parties. 
Revises the regulations governing Employment Appeal Tribunals to allow appeals to be heard by a judge sitting alone, unless directed otherwise by a judge. 
Introduces a power for Employment Tribunals to order employers who have breached workers’ rights to pay a financial penalty to the Government where there are ‘aggravating features’ of the case. The penalty range will be between £100 and £5,000 and will normally be 50% of the amount of any award made against the employer by the Tribunal. 
Compromise agreements will become Settlement agreements 
• Allow employers to have ‘protected conversations’ with an employee with a view to terminating their employment under a settlement agreement. 
• Allow the Secretary of State to change, by order the limit on the Unfair Dismissal compensatory award to median annual earnings, three times median annual earnings or 52 times the week’s pay of the individual 
• The inclusion in the Equality Act 2010 to provide for regulations to require Employment Tribunals to order an employer to conduct an Equal Pay Audit if they are found to be in breach of equal pay regulations. 
 
This is quite a significant piece of legislation and a further update will be provided next month... 
 
Employment Tribunal Fees and Awards  
 
These have been in the pipeline for some time and summer 2013 will finally see these fees imposed. The purpose of charging fees for bringing a claim to an Employment Tribunal will be to encourage employers and employees to try to mediate or reach a settlement rather than immediately taking a claim to a full hearing. 
 
The fees have not yet been confirmed but early indications are that they will be: - 
• Level1 Claim – Issue fee - £160 and full hearing fee - £230 
• Level 2 Claim – Issue fee - £250 and full hearing fee - £950 
 
Level 1 claim’s are likely to be simpler cases and will include unlawful deduction from wages, holiday pay and redundancy payment claims. Whereas Level 2 claims’ will be those which are more complex and which will take longer to determine and will include discrimination, equal pay and unfair dismissal claims. 
 
The implementation of the charging structure will broadly coincide with any impact of the changes to the qualifying periods for bringing unfair dismissal claims which were introduced in April 2012 and so any impact on the Tribunal System of introducing charge may not be immediately obvious. 
 
As a reminder; from 1st February 2013, the following limits were applied to awards made by an Employment Tribunal: - 
• Compensatory Award for Unfair Dismissal - £74, 200 (increased from £72,300) 
• Maximum amount of a ‘week’s pay’*- £450 (increased from £430) 
• Maximum amount of ‘daily’ Guarantee Payment - £24.20 (increased from £23.50) 
 
* To be used for the purposes of calculating a basic or additional award of compensation for unfair dismissal or redundancy payment. 
 
Owner-Employee Contracts 
 
Despite a decidedly ‘frosty’ reception to this Government proposal from businesses, the Government have decided to press ahead with the implementation of these contracts from April 2013; thus creating an additional category of employment status alongside worker, employee and self-employed and some may say, creating an additional layer of confusion. 
 
We will wait to see what the take-up of these contracts is later in the year and the impact of them on the economy and labour market. 
 
Unpaid Parental Leave 
 
From March 2013, there will be an increase in the amount of unpaid parental leave that employees are able to take from 13 weeks to 18 weeks for each child up to their 5th birthday or for those whose children qualify for ‘Disability Living Allowance’, up to their 18th birthday. For parents of adopted children, this applies to the child’s 18th birthday or the 5th anniversary of their adoption, whichever is soonest. 
 
Eligibility for this leave is acquired upon the completion of one-years’ employment with their employer and carries over from employer to employer i.e. if an employee has taken eight weeks parental leave with one employer and transfers to another, they will be eligible to take a further ten weeks once they have achieved the necessary qualifying employment. 
Children and Families Bill 2013 
 
The Children and Families Bill has just passed through its Second Reading in the House of Commons and is now awaiting a date when it will be passed to the Committee Stage. This Bill introduces the concept of ‘shared parental leave and flexible working’; meaning that new parents – both mum and dad, will be able to share a year’s worth of parental leave. It is hoped that this change will encourage more fathers to play an active role in their children’s upbringing by allowing them to stay at home after the birth. 
 
The proposals will allow leave to be taken by parents in turn or to take to the time off together, provided that the combined total of the leave taken does not exceed 52 weeks. This is the very early stages of the Bill’s passage through Parliament and we will continue to monitor and report on its progress. 
 
Reduction of Collective Consultation Period 
 
From 6th April 2013, the current 90 day consultation period where it is proposed to make 100 plus people redundant will be reduced to 45 days. The position where it is proposed to make between 20 and 99 employees redundant is unchanged at 30 days and there is no statutory consultation period when fewer than 20 employees are at risk of redundancy. 
 
The statutory consultation period allows employers enter into discussions with their employees or their representatives about the proposed redundancies, including the reasons why redundancies are necessary and what, if any, are the alternatives to redundancies. Consultation has to be conducted ‘meaningfully’, in that employers have to be open to discussions about alternatives and should not approach the process with a fixed view on what the outcome will be. Employees who believe that the employer has not consulted properly e.g. if they don’t fulfil the statutory timescales, fail to consult meaningfully or at all, may have recourse to make a claim to an Employment Tribunal. 
 
This move has been welcomed by employers, but understandably is opposed by Trades Unions and we will monitor the impact of this change once it has been implemented. 
 
Real-time Payroll Information 
 
This is a change which will be introduced by HMRC from April 2013 and will impact upon all employers. Currently, employers submit their payroll information e.g. payments and deductions to HMRC at the end of year, but from April they will be required to do this ‘in real time’ i.e. each time they make a payment to an employee. The purpose for making this change is to make improvements to the way in which the PAYE scheme is operated and making PAYE deductions more accurate for individuals. In addition, it will support the operation of the ‘Universal Credit’ scheme which is being introduced from October 2013. 
 
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