Weekly Employment Update - 4th January 2012

Welcome to Ashfords' Weekly Employment Update, where each week we consider recent developments in Employment and HR issues. In this first update of the new year, we look ahead to the changes coming up in employment law in 2012.

The rapid pace of change in employment law looks set to continue during 2012.  Significant developments expected this year include the following:

• Statutory Limits on Tribunal Awards: These will increase in February.  The limit on a week's pay (for the purposes of calculating redundancy payments and the basic award in unfair dismissal cases) will rise from £400 to £430, and the maximum compensatory award for an unfair dismissal will increase from £68,200 to £72,300.

• Tribunal Fees: In March, the Government's consultation on the introduction of fees for bringing employment tribunal claims will close.  The details of these fees will be of interest to employers, in particular in terms of the impact they have of reducing speculative claims.

• Qualifying Period for Unfair Dismissal: In April, this will rise from one to two years.  Employers will be able to dismiss employees with fewer than two years' service without giving a fair reason, although they will need to be careful to avoid claims of discrimination, which will stay open to all employees.

• Statutory Payments: From April, the rate of statutory sick pay will increase from £81.60 to £85.85 per week, as will rates of maternity, paternity and adoption pay (from £128.73 per week to £135.45 per week).

• Tribunal Procedure: Changes to the tribunal process are expected to come into force in April.  Judges will be able to hear unfair dismissal cases without the two lay members that currently sit, and in most cases will take witness statements "as read".  The maximum size of a costs award and deposit order will also double. 
  

• Pensions Auto-Enrolment: From October, employers will be obliged to automatically enrol eligible employees in a pension scheme and to contribute to that pension.  Although it will be larger employers that are affected first, employers of all sizes need to begin preparing for this change.

• Holidays and Sickness Absence: Changes to the Working Time Regulations 1998, to allow sick workers who are unable to take their annual leave to carry it over, are expected later this year.  It is hoped that this will resolve the current inconsistency between UK legislation and EU case law.