Employment Law Reforms, 6 April 2014
Today brings a few changes to employment laws in the UK, most notably (for SMEs) the possibility of “financial penalties” for employers that lose in an employment tribunal claim. This is a new penalty that would apply as well as any award to an employee – and could apply even if no financial award is made to an employee.
The minimum amount payable under this new law is £50 – if a minimum penalty of £100 is paid within 21 days (the penalty will be reduced by 50% if paid within 21 days) – and the maximum is £5,000.
This is a new law, and its application is currently only subject to the Explanatory Notes that Parliament has provided, so is likely to be subject to some case law in due course.
The key term that any arguments will fall around will be “aggravating” – defined generally as to make a position worse, more difficult than it was necessary to be. Guidance note 100 (to the Enterprise and Regulatory Act 2013 – which inserted the section into the Employment Tribunals Act) provides a “non-exhaustive list” (or perhaps non-relevant list) that a tribunal may consider, which includes the size of the employer, or the behaviour of the employer and of the employee. Guidance note 101 goes to on to provide more details of when parliament might expect an award to be made under this section: where an act was deliberate or committed with malice; an employer had a HR team; the employer repeatedly breached the employment rights.
For employers that are likely to successfully defend an unfair tribunal claim (our clients), most of these changes won’t matter. However, some SMEs still don’t issue a Statement of Particulars, and the law currently only allows an award (to the claimant) for a failure to issue a Statement of Particulars (a basic employment contract, or the core terms of this) where another claim is also upheld. In the future, as an employee is entitled to be issued with a Statement of Particulars, a tribunal could make a penalty (even without an other award) for this issue alone.
Another change to employment laws is the need for prospective claimants to contact ACAS in advance of making a claim – Early Conciliation. As claimants do not need to provide authority to contact the respondent, whether this will bring the savings ACAS forecast is open to speculation.
Our advice does not remains the same: if you receive notice of a pre-claim conciliation, and a Statement of Particulars has not been issued, issue one! Section 38 (2), Employment Act 2002, only applies to proceedings:
“when the proceedings were begun the employer was in breach of his duty to the employee under section 1(1) or 4(1) of the Employment Rights Act 1996 (c 18) (duty to give a written statement of initial employment particulars or of particulars of change)”.
If you know you haven’t issued this important document and get notice of a potential claim, get the Statement of Particulars issued – use the free templates available online to avoid any penalty.
Or contact us: