Employment Law 2014 – Small Business

2013 saw a number of legislative developments in the area of employment law and 2014 will bring many more. In this article we review the key recent and future changes that might affect, in particular, small business.

Looking back

Tribunal fees

The introduction of tribunal fees in July 2013 made it more expensive for would-be litigants to bring a case against their employers, with listing fees of up to £250 due at the outset and another potential £950 if the case is to progress to a hearing, though rather more modest fees exist in Scotland.

Before July it was free for employees to bring a tribunal claim and supporters of the changes say that this led to a litigant culture of ill-conceived cases designed to entice employers to pay out settlements rather than go to the time and expense of legal fees of defending claims. The critics of fees conversely felt that their introduction impeded the ability of the least well off to access justice, a (claimed) direct breach of human rights legislation.

Unison in England and a private practice in Scotland raised challenges in their respective courts and both challenges have so far been rejected by the lower courts, but further appeals are certain to see the case ascend the hierarchy of the UK courts before arriving in their ultimate destination, the European Court of Justice.

For now though fees remain and the predicted corresponding reduction in the overall level of tribunal claims appears to be happening as predicted. Sensible abatement of nonsense claims or unfair barrier to justice? Time will tell, for now the jury’s out.

Settlement Agreements

The other significant development in 2013 was the introduction of confidential termination discussions, designed to enable employers to suggest a mutually agreed exit with an employee without following fair process as would normally be required in one of the other 5 categories of fair dismissal.

This is more subtle tweak than revolution because in reality Compromise Agreements had been in use for decades, but the subtle tweak (I will describe in a moment) and the ensuing publicity is likely to see Settlement Agreements (now called) much more commonplace in the UK.

Under the old Compromise Agreement the employer always ran the risk of a disgruntled employee in receipt of such an invitation ‘out of the blue’ resigning and claiming ‘constructive dismissal’ on the basis of a breach of trust and confidence. The amended legislation introduced the concept of legal protection for employers raising this topic in the absence of any existing dispute. It’s the ‘existing dispute’ bit that’s key, because existing disputes can (and could always) be covered by the ‘Without Prejudice’ rule ensuring that settlement discussions are kept safely out of court. Until last year no such protections existed for ‘out of the blue’ proposals, a protection the amended legislation now provides.

Employers should beware though that this new protection cannot be used in cases of unlawful discrimination, or in cases where the employer behaves badly in order to obtain agreement or unreasonably threaten sanctions if he is unable to obtain the employee’s agreement.

Looking ahead

Flexible working

As well as continuing challenges to some of the 2013 changes new legislation will include the extension of flexible working requests to everyone (it applies to just parents and carers at present) whereby employers are obliged to consider requests for flexible work and, if rejecting, to do so on one of 8 statutory grounds.

Flexible working legislation has been with us for many years now and statistically more employers grant than refuse requests, this perhaps leading to legislators concluding that this change is unlikely to inconvenience employers greatly. We imagine extra care will still be required when dealing with those requests for the purposes of child and dependent care, the former of which carries potential sex discrimination implications the latter may have consequences under discrimination laws (now under the Equality Act and requiring reasonable adjustments to be made to accommodate those who themselves have a disability of if they are associated with another person who has a disability).

A common misconception under flexible working legislation is that employees can chop and change their hours/days according to today’s preferences – they can’t – a flexible request brings a permanent change to the employment contract and no new request can be brought within 12 months of the last one. Employers will need more guidance on this topic once the amended legislation is confirmed.

Early conciliation

From 6th April 2014 all new tribunal cases will be subject to compulsory early conciliation under the supervision of ACAS, the government funded advisory, conciliation and mediation service. Under early conciliation both employer and employee will be invited to engage in conciliation and will be issued an early conciliation certificate once complete, and whether conciliation was successful or not. Without this certificate an employee will not be able to continue with a tribunal claim.

Employment tribunal fines

Also in April tribunals will be able to levy a separate fine on employers who lose an employment tribunal claim, this will be between £100 and £5,000, with a 50% reduction for employers paying in 21 days.

Minimum wage

Not normally worth a mention in this article but this year very much a political football, it is likely that we will see the adult rate stretching half way towards £7 per hour in 2014, suggesting (and this is our guess) a rate of £6.65, up from the current rate of £6.31. The press have widely covered the ‘£7 per hour minimum wage’ in most cases failing to highlight that the politicians have been saying ‘by 2015’, with this period covering 2 planned increases in October 2014 and 2015.

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