April 16, 2014

The BIG April 2014 Employment Law Changes: In Brief

A wide range of employment law changes came into effect on 6 April, which have a big impact on both UK employers and employees.

Here’s a quick rundown of the changes that might affect your business…

ACAS Early Conciliation Scheme

An Early Conciliation scheme has been launched to help reduce the number of Employment Tribunal claims. Employees with grievances will now go through ACAS before lodging a claim at an Employment Tribunal.

Unlike tribunals, the service is free and there is no requirement to pay a fee is a settlement is reached. The scheme has been available since 6 April and will be compulsory for tribunal claims after May 6, 2014.

Employers do not have to take part in conciliation, first contact for tribunal claims must be with ACAS. For unresolved grievances, ACAS will issue a certificate which allows the issue to progress to Employment Tribunal.

New financial penalties for employers

Employer can be charged between £100 and £5,000 for losing Employment Tribunal claims where ‘aggravating features’ are present

This is a risk for employers who have repeatedly breached of employment laws, or who have been deliberately malicious or negligent. The minimum penalty will be roughly half of the financial award made to the employee.

Abolishment of discrimination questionnaires

The mandatory requirement for employers to respond to discrimination questionnaires submitted by employees is being abolished. However, employers should still respond to questions about discrimination, still it could reflect poorly at Employment Tribunals – according to ACAS.

Amended employment tribunal fees

Last July, Employment Tribunal fees were introduced, with the amounts depending on whether the claim was categorised as ‘Type A’ or ‘Type B’.

Some complex employment claims had been incorrectly categorised – some less expensive ‘Type A’ fees, should have been classified as ‘Type B’. This does not apply to claims presented before 6 April 2014, but will affect claims from now on.

Pension rule changes

A new employer now has the option of matching a previous employer’s level of pension contributions. Previously, new employers had no option but to match the employee’s chosen contribution rate up to 6%.

Under current auto enrolment rules, employer contributions are limited to one or two per cent.

Employee pay adjustments

Statutory payments have been changed to take inflation into account, increasing maternity pay, ordinary, additional paternity and adoption pay from £136.78 to £138.18.

Statutory sick pay has increased from £86.70 to £87.55, although the biggest change for employers is that the statutory sick pay percentage threshold scheme has now been abolished.

This threshold allowed employers to recover amounts of statutory sick pay from HMRC, where the total amounts paid exceeded 13 per cent of their Class 1 National Insurance contributions bill.

Employment tribunal compensation limits increase

The maximum compensation for unfair dismissal has risen from £74,200 to £76,574. However, there is an additional cap of one year’s salary on the compensatory award, which came into effect on 29 July 2013.

The maximum amount of compensation a week’s pay for calculating a basic award for unfair dismissal, redundancy pay, as well as a number of other awards, has increased to £464, with a new maximum basic award/redundancy payment of £13,920.

Penalties for employing illegal workers increase

The maximum civil penalty for employing workers who do not have the right to work in the UK has increased from £10,000 to £20,000, strengthening immigration controls and sending a clear message to employers.

Despite the significant number of employment law changes that have come into effect, the Government’s aim overall appears to be focussed on reducing red tape and simplifying processes for both employers and employees.

Want advice on the latest Employment Law? Call us on 0345 184 4615.

Find out more about Moorepay Early Conciliation support

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