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April 2014 HR legislation explained

Peter Crush

New HR legislation

It’s positively raining new HR legislation this April. Peter Crush rounds up the changes and the things you need to know

When it comes to keeping abreast with the latest employment law changes, 2014 has already got off to a busy start. Changes to TUPE came into force in January, as did new rules for those in financial services, restricting bonuses to one years’ base salary (or two years’ with shareholder approval). Meanwhile auto-enrolment for small-mid sized companies also trundles along with staging dates throughout 2014. But this is nothing compared to what’s just around the corner this April, when start of the new financial year marks yet more HR law you need to know about. We’ve compiled a rundown of the five key regulations you need to know about:

The right to request flexible working

Officially 96% of businesses offer some form of flexible working (everything from homeworking, job shares, compressed hours, term-time working and annualised hours; source CIPD). But this is by no means universal. In the charity sector, for example 15% don’t offer it at all (source: TTP Not For Profit), while up till now, exclusions still also applied. Only those with children or caring responsibilities had an automatic right to request flexible working – which often caused resentment from young, single and carefree employees. From 6 April however, thanks to the Children & Families Bill passing into law, this ‘perk for some’ has been updated to become a universal right to request flexible working. Under the new provisions anyone with more than 26 weeks’ continuous service can now request they work flexibly. Employers can still refuse it on eight different grounds (see box), but if they’ve never thought about flexible working before, they’ll certainly need to draw up policies for ensuring individual requests are dealt with on a fair and case-by-case basis. Not only this, there could well be new issues to think about too: “Every time line managers accept a request for flexible working, they need to acknowledge that it changes the nature of the business, and how everyone else will have to work,” says Sarah Jackson, CEO, Working Families. She adds: “Saying yes to one person’s needs may mean that when someone else, facing a similar situation, asks for the same time off, it won’t be possible for them, because they need to cover that other person.” It’s worth noting too, that these regulations are part of a phased-in period of increasingly more family-friendly laws employers will need to get better at dealing with. For instance, shared parental leave comes into force in April 2015, and will change working dynamic again.

There are eight reasons bosses can refer to for refusing flexible working for. These won’t change after April 2014, and are:

• The burden of additional costs
• Detrimental effect on ability to meet customer demand
• Inability to re-organise work among existing staff
• Inability to recruit additional staff
• Detrimental impact on quality
• Detrimental impact on performance
• Insufficiency of work during the periods the employee proposes to work
• Planned structural change

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Conciliation must come before tribunals

Last year’s Enterprise and Regulation Reform Act (ERRA) brought in a significant change in the balance of power between employees and employers. Before then employees could bring a tribunal against their employer without any expense to themselves. It was a loophole groups like the CBI claimed was causing a rise in spurious, have-a-go claims (which cost employers an average of £8,500 to defend). ERRA changed this, requiring claimants to pay an upfront fee themselves to show they were serious. This April, the final provisions of ERRA go even further. It now requires employees to seek conciliation first (through ACAS or other bodies, for up to a month) before they can even bring a claim forward. The intention is to nip the prospect of an at-work disagreement becoming a tribunal in the bud, to stop tribunals happening at all. More good news for employers is the fact that while the maximum compensation an employee can win for unfair dismissal is still £74,200, ERRA states that the default position will now be that the payment to staff should be one years’ pay ‘or’ £74,200, whichever is lower. The ‘whichever is lower’ is crucial here. Tim Forer, barrister, Blake Lapthorn LLP says: “This means that if a claimant is only actually paid £20,000 pa, they will now know that’s the most they can win. Not only is this likely to reduce vexatious claims, but employers will also know the maximum that can be claimed and what the likely risk is of defending a tribunal in court.” But the law doesn’t entirely favour employers. April’s provisions also include new fines for employers who lose a tribunal (the minimum is £100; the maximum is £5,000, paid direct to the Secretary of State). However, there will be a 50% discount for prompt payment.

Equal Pay Audits can be ordered

Not to be finished yet, from April ERRA also prescribes that equal pay audits can be ordered where an employer in an employment tribunal has breached the equal pay provisions under the Equality Act 2010. Officially coming into force in April, the government has indicated that the likely implementation date is October 2014. While it’s still important employers know about this, it’s the one change that’s likely to have the least impact. Richard Lister, practice development lawyer, Lewis Silkin LLP says: “While concerns have been expressed about this measure, the small number of equal pay cases which ever reach a tribunal means these proposals are likely to have limited effect. Statistics show that less than 1% of the equal pay claims result in a tribunal ruling in the employee’s favour, so pay audits could never be ordered in the vast majority of cases.”

Discrimination questionnaires to be abolished

April sees the end of employees being able to ask for extensive information (workforce statistics, previous discrimination claims or a company’s equality policies) when bringing forward an employment tribunal for discrimination. However employers should note that staff (under the 1998 Data Protection Act), will still be able to ask for personal data and other polices when putting their case together. Simon Quantrill, managing partner, employment law specialist, Quantrills, said: “Failure to provide replies may well mean the tribunal will take this into account. There will also be the ongoing right for both parties to raise additional questions.” He added: “Originally we thought their abolition was an unwelcome development wrongly being justified as a piece of red tape. But over the last few months we have arrived at the conclusion that the loss of the questionnaires is going to be a genuine cost saving benefit to employers.”

Statutory payment increases

Finally, from 6 April 2014, employees will need to budget-in changes to the new rates of statutory payments. Statutory Sick Pay increases from £86.70 to £87.55 per week as long as weekly earnings are £111 or more. Statutory Maternity Pay increases from £136.78 to £138.18 per week (which is also the same for statutory paternity and adoption payments). Minimum wage rises have so far been resisted, but calls continue for more employers to bring in a ‘living wage’ – which is set at £7.65 (the amount that gives people a fair standard of living), and which significantly higher than the current £6.31 minimum wage.

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