Employment Law

With effect from 6^th April 2014 there will be new rates of Statutory Maternity Pay and Sick Pay etc.

The new rates are as follows:-

1. An increase in Statutory Sick Pay from £86.70 to £87.55
2. Increases in Maternity Pay, Ordinary and Additional Paternity Pay, and Adoption Pay from £136.78 to £138.18.

If you need any advice in respect of any issues relating to Statutory Maternity Pay and or Statutory Sick Pay etc, then please contact Daven Naghen of our Employment Team on 01775 722261 or email daven.naghen@maplessolicitors.com or write to Dav at 23 New Road, Spalding, Lincolnshire PE11 1DH.

From 6^th April 2014 there will be an increase on the limits on certain Employment Tribunal awards and other amounts payable under Employment Legislation.  The notable changes include the following:-

1. The limit on the amount of a week’s pay for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal will increase from £450 to £464;
2. The maximum compensatory award for unfair dismissal goes up from £74,200 to £76,574.  You should note that since 29^th July 2013 there has also been an additional cap of one year’s salary on the compensatory award for unfair dismissal.  The applicable figure will be the lower of either £76,574 or one year’s salary;
3. Guarantee pay increases from the rate of £24.20 to £25;
4. The minimum basic award in cases where the dismissal was unfair by virtue of health and safety, employee representative, trade union or occupational pension trustee reasons will increase from £5,500 to £5,676.

These increases reflect the increase in the retail prices index of 3.2% from September 2012 to September 2013.

As a result of these changes the maximum basic award for unfair dismissal will therefore increase from £13,500 to £13,920.  This makes the maximum total basic and compensatory awards for unfair dismissal £90,494 (increased from £87,700).

If you need any advice on these matters then please contact Daven Naghen, head of our Employment Team, on 01775 722261 or email daven.naghen@maplessolicitors.com or write to Dav at 23 New Road, Spalding, Lincolnshire PE11 1DH.

New law came into force on 29^th July 2013 which provided that in certaincircumstances evidence of ”pre-termination negotiations” between an employer and an employee cannot later be used in evidence in an unfair dismissal claim by an employee. 

Prior to 29^th July 2013 when a “dispute” had arisen between an employer and an employee e.g. the employee had already started a claim or intimated a claim the parties could have a “without prejudice” discussion (i.e. off the record) with a view to resolving the dispute.  The “without prejudice” label would mean such discussions could not be referred to by an employee in any subsequent Tribunal claim. 

The new law seeks to deal with the difficulties of being able to have “without prejudice” discussions when there is no “dispute”, e.g. when an employer thinks that “it is not working out”.  Under these proposals an Employment Tribunal would not be able to take account of any offer made or discussions prior to the termination of the employee’s contract where the aim was to bring the employee’s contract to an end on “agreed” terms.  This is however only limited to employee’s making claims for unfair dismissal.  This sounds great but Daven Naghen, head of our Employment Team, comments as follows:-

“The new rules only relate to claims brought by employees for unfair dismissal, and such conversations are not protected say for the purposes of a claim for discrimination. Furthermore if there is say a joint claim of unfair dismissal and discrimination, then it is likely that the Employment Tribunal will hear evidence of the conversation as part of the discrimination case. Therefore the employer cannot necessarily count on the fact that such conversations will be protected. 

Furthermore the rules will not apply if the Employment Tribunal consider that the behaviour of the employer is “improper”, giving the Employment Tribunal a wide discretion as to whether or not to hear evidence of such discussions.  “Improper” behaviour could for example cover things such as not allowing the employee a reasonable amount of time to consider a proposal or telling an employee that if he or she does not agree terms then he or she will be fired in any event. 

Therefore there are absolutely no guarantees that any such conversations between an employer and an employee will be protected. 

ACAS has provided a Code of Practice (which an Employment Tribunal must take into account) and a Guide.  However I would strongly advise any employer that before commencing any difficult conversations with an employee relating to the possible termination of the employee’s contract that legal advice is obtained on how to approach and deal with the conversation.”

If you need any help or guidance on this issue then please do not hesitate to contact Daven on 01775 722261 or email Daven at daven.naghen@maplessolicitors.com or by writing to 23 New Road, Spalding, Lincolnshire PE11 1DH.

Introduction

The Children & Families Act 2014 (“the Act”) has now received Royal Assent.  The Act contains a number of employment law changes including a new system of shared parental leave and the extension of the right to request flexible working to all employees.  The extension of the right to request flexible working is intended to come into force as soon as the 30^th June 2014.

Shared Parental Leave

The Act creates a new right to shared parental leave and pay for eligible working parents.

All employed women continue to be eligible for statutory maternity leave and statutory maternity pay or maternity allowance in the same way as currently.  However if a mother chooses to bring her leave or pay or her allowance to an early end, eligible working parents can share the balance of the remaining leave and pay as shared parental leave and pay, up to a total of 50 weeks of leave and 37 weeks of pay.  Eligible adopters can also use the new system for shared parental leave and pay.

The Act also introduces changes to the existing adoption leave and pay regime, extending it to include prospective parents in the “fostering for adoption” system, and intended parents in a surrogacy arrangement who are eligible and intend to apply for, a parental order.  Adoption leave and pay will also reflect entitlements available to birth parents from April 2015, such as no qualifying period for entitlement to leave and statutory adoption pay being raised to 90% of salary for the first six weeks.

The government intends the arrangements for shared parental leave and pay to come into effect in relation to babies due and children matched or placed for adoption on or after the 5^th April 2015.

Time off Work for Anti-Natal Care

The Act creates a new right for employees and qualifying agency workers to take unpaid time off work to attend up to two anti-natal appointments with a pregnant woman.  The right is available to the pregnant woman’s husband, civil partner or partner (including same-sex partners), the father or parent of a pregnant woman’s child, and intended parents in a surrogacy situation who meet specified conditions.  Provision is also made for paid and unpaid time off work for adopters to attend meetings in advance of a child being placed with them for adoption.  The government intends these provisions to come into effect from the 1^st October 2014.

Right to Request Flexible Working

The Act extends the right to request flexible working to all employees from the 30^th June 2014.  It also removes the statutory process that employers must currently follow when considering requests for flexible working.  In future there will be a duty on employers to consider requests in a “reasonable” manner.  ACAS has published a draft code and guidance on flexible working to help employers prepare for changes in the law.

If you require any advice or guidance on any of these subjects or any employment law related issue then please do not hesitate to contact Daven Naghen on 01775 722261 or email daven.naghen@maplessolicitors.com or write to Dav at Maples Solicitors LLP 23 New Road Spalding Lincolnshire PE11 1DH.

Introduction

Under the Growth and Infrastructure Act 2013 (Commencement Number 3 and Savings) Order 2013 the new employment status of employee shareholder was introduced with effect from the 1^st September 2013.

Under the scheme, employee shareholders waive certain rights such as the right not to be unfairly dismissed, the right to a statutory redundant payment etc (subject to some exceptions and limitation) in return for at least £2,000.00 of shares in the employer’s company.

Existing employees who refuse to become employee shareholders are protected from dismissal or other detriment but job applicants who are refuse an employee shareholder job because they do not want to join the scheme will not be afforded protection.

Employees must receive independent legal advice before joining the scheme, and the company must meet the costs of the advice.

Interest in the Scheme

There was a consultation on the employee shareholder status in October 2012, but the results showed that only a very small number of respondents anticipated using the proposed status.

Daven Naghen, head of the Maples Employment Team, does not expect interest in the scheme to increase significantly:-

“From an employee’s prospective they are unlikely to be interested in such a scheme as they will not want to lose certain employment rights (e.g. right not to be unfairly dismissed) and they will need to weigh up the value of any potential compensation they are waiving against the benefit they will gain from the shares.

Employers are likely to be put off by having to pay for the employee to take independent legal advice even where the employee decides later not to proceed with the scheme, as well as the cost of share valuations and any buy-back requirements.

There is however some enthusiasm for the scheme with start-ups and fast growing companies.

Possible tax-savings are likely to be of great interest to senior employees, particularly those in companies with good growth potential.

I remain sceptical as to whether interest in the scheme will significantly increase.”

How does the Scheme propose to help running a Business?

The intention of the scheme is to provide a flexible workforce for small and medium sized businesses.  Although it cannot be imposed on existing employees, it could be imposed on future employees.  This means that smaller businesses can recruit knowing that ordinary unfair dismissal claims cannot be brought against them, giving these businesses greatly flexibility in re-structuring and greater certainty of termination costs.

Implications in terms of Tax

The most significant tax relief under the scheme is that shares acquired in consideration of an employee shareholder agreement are exempt from capital gains tax, representing a potential tax saving of up to 28% of the growth in the value of the shares from acquisition until disposal. The relief only applies if at the time of acquisition the market value of the shares is not greater than £50,000.00.

Income tax may arise on acquisition of the shares by the employee shareholder but only to the extent that the market value of the shares on acquisition exceeds £2,000.00.

HMRC has helpfully indicated that it will agree a market valuation of shares with a company before such a scheme is commenced.

Obviously advice should be taken from a tax specialist or financial advisor on these points. Do you need Advice?

If you are a business considering entering into such a scheme, or you are an employee that has been offered such a scheme, then please contact Daven Naghan for advice and guidance on 01775 722261 or email daven.naghen@maplessolicitors.com or write to Dav at 23 New Road Spalding Lincolnshire PE11 1DH

At the end of last year we advised that the Government was considering the abuses of the zero-hours contract system and whether legislative changes were required.  Last month (December 2013) the Government published a Consultation on the Use of Zero-Hours Contracts.

As anticipated the Government does not propose an outright ban of the contracts, but does feel that a ban on “exclusivity clauses” might be appropriate.  “Exclusivity clauses” prevent workers from working for more than one employer in contracts that offer no guarantee of any work.

The consultation continues until the 13^th March 2014, and the Government is still seeking views on the position regarding “exclusivity clauses”.

We shall keep you informed as to how the consultation proceeds, and what if any law changes follow.

If you need advice or guidance on Zero-Hours Contracts then please contact Daven Naghen on either 01775 722261 or email daven.naghen@maplessolicitors.com or write to Dav at 23 New Road Spalding Lincolnshire PE11 1DH.