Employment law 2012: a preview

The rapid pace of change in employment law looks set to continue during 2012.

Statutory Limits on Tribunal Awards will increase in February.  The limit on a week’s pay (for the purposes of calculating redundancy payments and the basic award in unfair dismissal cases) will rise from £400 to £430, and the maximum compensatory award for an unfair dismissal will increase from £68,200 to £72,300.

The Government’s consultation on the introduction of Tribunal Fees for bringing employment tribunal claims will close In March.  The level of fees will be of interest to assess the impact they may have on reducing speculative claims.

In April, the Qualifying Period for Unfair Dismissal will rise from one to two years.  Employers will be able to dismiss employees with fewer than two years’ service without giving a fair reason, although they will need to be careful to avoid claims of discrimination, which will stay open to all employees.

In April, the rate of Statutory Payments will increase to: sick pay from £81.60 to £85.85 per week; maternity, paternity and adoption pay from £128.73 per week to £135.45 per week.

Changes to the Tribunal Procedure are expected to come into force in April.  Judges will be able to hear unfair dismissal cases without the two lay members that currently sit, and in most cases will take witness statements “as read”.  The maximum size of a costs award and deposit order will also double to £20,000.

Pensions Auto-Enrolment: Starting from October larger employers (those employing more than 120,000 people) will be obliged to automatically enrol eligible employees in a pension scheme and to contribute to that pension.

Each month a new batch of employers will become subject to the employer duties. By 1 September 2016 all UK employers will have to comply. An employer will become subject to employer duties when it reaches its staging date, which is determined by reference to the size of an employer’s PAYE scheme. However, the Government has announced changes to the way that the employer duties are being introduced. Employers with fewer than 50 persons in their largest PAYE scheme will not be staged into the employer duties until after the end of this Parliament.

Employers with 3000 or more persons in their PAYE scheme, ie those with likely staging dates between 1 October 2012 and 1 July 2013, will be unaffected and their staging date will be unchanged.