What Are the 6 April 2014 Changes?

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Here is a summary of the new employment measures and changes introduced on 6 April. These are detailed below and if any prompt questions or comments please do not hesitate to contact us.

We have also provided an update on a number of other key employment law issues on which we are keeping a close eye.

6 April Changes What to watch out for
Compensatory Awards The maximum compensatory award which may be made by a tribunal will increase from the lower of 52 weeks’ pay or £74,200 to the lower of 52 weeks’ pay or £76,574 (in Northern Ireland only this rate is £76,600).
Minimum Weekly Pay For the purposes of calculating entitlements to, for example, statutory redundancy payments the ‘week’s pay’ will be capped at £464 (in Northern Ireland only £470) – it is currently £450.
Acas early conciliation The statutory provisions introducing Acas early conciliation in tribunal claims will be brought into force (by the snappily labelled Enterprise and Regulatory Reform Act 2013 (Commencement No. 5, Transitional Provisions and Savings) Order 2014 (SI 2014/253)).Transitional provisions cover the period between 6 April and 5 May 2014 during which early conciliation will be available to prospective claimants on a voluntary basis. For claims presented on or after 6 May 2014 early conciliation will be mandatory.
Increased penalties for employing illegal workers A draft order has been laid before Parliament which (assuming it comes into force on 6 April 2014) will increase the maximum civil penalty which may be payable for employing adults who are subject to immigration control but do not have the right to work in the UK. The draft order increases the maximum penalty from £10,000 to £20,000.
Right to recover statutory sick pay from HMRC The Percentage Threshold Scheme enables employers to reclaim Statutory Sick Pay from HMRC, where the total SSP paid in a month exceeds 13% of their Class 1 National Insurance Contributions for that month. A draft Order abolishing the scheme, as part of the Government’s review of health at work, has been laid before Parliament and approved by the House of Lords on 12 February 2014. It is expected to take effect on 6 April 2014.
Financial penalties for losing employers in tribunals Tribunals will have the power to order that a losing employer pay a financial penalty in specified circumstances. This will apply in cases presented on or after 6 April 2014. The penalty, payable to the tribunal, is up to £5,000 and will be payable where there are ‘aggravating features’.
The Children and Families Bill This bill is due to receive Royal Assent on 21 March 2014. The bill introduces the planned changes to the flexible working regime (allowing anyone to apply for flexible working after a 26 week qualifying period). However, the Government now says the implementation of this new regime will not be possible for 6 April as planned. We can expect the changes to come into effect on 30 June 2014.
Discrimination Questionnaires The statutory questionnaires are being abolished in discrimination cases with effect from 6th April 2014. Acas, in the meantime, has produced some useful guidance on asking and responding to discrimination questions (found on the website – www.acas.org.uk).
The Issues What to watch out for
Removal of collective redundancy ‘establishment’ test As a result of the Ethel Austin/Woolworths cases in February the Court of Appeal has asked the European Court of Justice to clarify the test for commencing collective consultation – the issue being what ‘establishment’ means.  The uncertainty around when collective consultation may be triggered therefore remains.  For now we suggest employers ignore the ‘establishment’ test and start collective consultation if 20 or more employees within the business as a whole, regardless of location are at risk of redundancy.  This requires careful record keeping and coordination across multi-site operations, with the risk of a protective award claim of up to 90 days’ pay per employee if the process is not correctly dealt with.
When collective consultation obligations are triggered? The European Court of Justice has declined jurisdiction to determine the issue of when collective consultation obligations are triggered and so this matter falls back to the Court of Appeal. We can expect a hearing, sometime this year, to establish whether consultation is triggered when an employer is proposing to make a strategic business or operational decision that will foreseeably lead to collective redundancies, or only once the employer has made that strategic decision and is proposing consequential redundancies.
Tribunal fees Whilst the recent judicial review on the introduction  of tribunal fees has been knocked back for now (we understand the decision will be appealed and even if it is not appealed could be revisited again) the Ministry of Justice guidance now states a successful claimant should generally expect to recover the fees paid from the respondent. Similarly, in appeal cases recent case law indicates successful appellants will be able to recover their fees from the losing respondent (Portnykh v Nomura International UKEAT/0448/13).
How to calculate Holiday pay This is the latest big issue to hit employment and HR advisers. A number of cases are being appealed to English and European courts. We (optimistically) hope that by the end of the year we will know if, for example, commission and overtime payments will need to be factored into the calculation of a week’s pay for the purposes of calculating holiday pay entitlements (Neal v Freightliner Ltd/Fulton v Bear Scotland Ltd/Lock v British Gas Trading Ltd).  A recent Employment Tribunal decision of help to employers (Elms v Balfour Beatty) settled before the appeal was due to be considered by the Employment Appeal Tribunal (EAT) on 25 February 2014.  Neal will be heard by the EAT on 10 April 2014.  We will update you on progress in this area in future updates.

For more information, help or advice please contact Tim Davies on 0191 211 7927 or anyone from our Employment Team.