On 6th April 2014, a number of changes to employment law were introduced. BLM employment partner Vanessa Latham sets out the top five changes that small business owners need to know, including changes to quality questionnaires, flexible working and financial penalties at employment tribunals.
1) Compulsory Acas conciliation before claim can be issued.
Anyone wanting to bring an Employment Tribunal claim now is required to register their claim with conciliation service Acas before proceedings are issued.
Acas will then mediate between the parties for a month, (which can be extended by 14 days if everyone agrees). The time limits for bringing an employment tribunal claim will also be extended (unless it was out of time when the form was submitted).
If the claim is proposed against you, you are entitled to decline conciliation at which point, the individual concerned is at liberty to issue proceedings.
2) Financial penalties on employers who lose in the tribunal
Employers who lose employment tribunal claims may now face a financial penalty. This will only be ordered where there are “aggravating features”, which is likely to include very unreasonable conduct, malicious behaviour or repeated breaches so will hopefully be relatively rare.
The sum will be 50% of any award made in the tribunal (subject to a £5,000 cap), although this is reduced by half if payment is made within 21 days.
It is payable to the Secretary of State (rather than the former employee) which has led to suggestions that this is purely a money making exercise by the Government. However, it could add a substantial amount to the cost of a claim and so must be taken into account when deciding whether to defend or settle.
3) Equality Act questionnaires are now obsolete but only in name, not principle
Previously employees and former employees could send a formal questionnaire to employers when they felt they had been subjected to discrimination. Any answers could be relied upon if a discrimination claim was issued and any failure to answer could be detrimental to the employer. This procedure has been repealed.
However, employees or former employees are still able to ask questions and the tribunal can take into account any failure to answer or evasive response given. As a result the change will have little practical effect, except that the employee will no longer be bound by the previous rules over when the questions could be asked.
4) Employers can no longer seek repayment of Statutory Sick Pay (SSP)
As the amount of SSP is increased to £87.55 per week, employers can no longer seek repayment of it from the HMRC.
Employers will now have to fund SSP themselves. The aim is said to be to encourage employers to get employees back to work but it has been, as with the financial penalties above, it could be argued that this is a costs saving exercise. The SSP record-keeping requirements have also been removed meaning that employers can keep sickness absence records in whatever way suits their organisation, although this is unlikely to have any significant practical effect
5) Changes to flexible working haven’t arrived just yet.
This one is a cheat. It is a change that was due to come in on 6 April but has now been delayed until 30 June 2014.
It is proposed that the right to request flexible working will be extended to all employees (currently only available to parents and carers) and the current formal procedure for requests will be removed. Employers will still have an obligation to deal with requests reasonably and respond within three months. They will also have the right to refuse on business grounds.
The Government’s stated aim of creating a more flexible workforce has, over recent years, resulted in employment changes that are generally favourable to small businesses. However, this seems set to change. Mediating with former employees, financial penalties for lost tribunal claims and funding staff on sick leave is likely to prove costly for small businesses.
Vanessa Latham is a partner who advises on the full range of employment-related disputes with a particular interest in long term sickness, discrimination and stress/harassment claims at BLM (http://www.blm-law.com/)
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