The Employment Rights (Increase of Limits) Order 2011 SI 2011/3006 will increase the limits on certain employment tribunal awards and other amounts payable under employment legislation from 1 February 2012.
The main changes are:
• the limit on the amount of a week’s pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal will increase from £400 to £430
• the maximum compensatory award for unfair dismissal goes up from £68,400 to £72,300
• guarantee pay increases from the rate of £22.20 a day to £23.50 a day; and
• 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 £5,000 to £5,300.
The new rates apply where the event giving rise to compensation or payment occurs on or after 1 February 2012. For example, in the case of unfair dismissal the rates apply to all dismissals where the effective date of termination falls on or after this date. Where the dismissal or relevant event falls before 1 February, the old limits will still apply.

The Department for Business, Innovation and Skills (BIS) has confirmed that the increase in the qualifying period for unfair dismissal claims to two years will only apply to those starting a new job on or after 6 April 2012. Employees whose employment started before 6 April will remain subject to the one-year qualifying period. Thus, someone with 18 months’ continuous employment on 6 April will not lose their right to claim unfair dismissal, and an employee with 11 months’ service on that date will still only have to wait one month before being able to claim. The regulations to extend the qualifying period will be published shortly and will be subject to Parliamentary debate.
Further details on the intended dates for a number of reforms announced last year as part of the Employment Law Review were given by the Employment Relations Minister Edward Davey in a written answer to Parliament on 17 January. Subject to parliamentary approval, changes to be effected via secondary legislation – witness statements being taken as read, the removal of witness expenses, judges sitting alone in unfair dismissal cases and changes to limits for cost awards and deposit orders – will come into force on 6 April 2012. Measures requiring primary legislation, including early conciliation, financial penalties for employers, judges sitting alone in the EAT as a default arrangement and an amended formula for uprating tribunal awards and redundancy payments, will be implemented when parliamentary time allows. The revised procedural code for employment tribunals expected as a result of Mr Justice Underhill’s fundamental review of the Employment Tribunal Rules of Procedure is expected to come into force in 2013, following public consultation and subject to parliamentary approval.

After months of speculation and leaks to the press the Conlibs have announced its plans for the ‘most radical reform to the employment law system for decades’. The wide-ranging changes, which include reform of the tribunal system, the introduction of tribunal fees, ‘no fault’ dismissals for micro-companies, and reducing the consultation period for collective redundancies, were described by Business Secretary Vince Cable as ‘emphatically not an attempt to give businesses an easy ride at the expense of their staff’.
Mr. Cable outlined the proposals in his speech to the manufacturers’ organisation, the EEF. Some of the most eye-catching are the unexpected ones that were not widely trailed before the speech. These include a proposal to remove protection for whistleblowing that relates to a worker’s own contract. Since the EAT’s decision in Parkins v Sodexho Ltd 2002 IRLR 109, an employer’s breach or likely breach of an employment contract has been a matter about which disclosures are potentially protected. In his speech, Mr. Cable referred to this as a ‘loophole’, which would be closed. He also announced a call for evidence on whether the 90-day minimum consultation period for collective redundancies should be reduced.
Among other proposals, the Government will also:
• seek views on introducing compensated ‘no fault’ dismissal for micro firms with fewer than 10 employees
• examine ways to ’slim down’ and simplify dismissal processes, potentially working with Acas to change their Code, or publishing supplementary guidance for small businesses
• publish a consultation on two options for the introduction of employment tribunal fees. The first option would require an initial fee to lodge a claim then a second fee to proceed to a hearing. The second option would require those seeking an award above GBP 30,000 to pay more to bring a claim
• call for evidence on proposals to simplify the Transfer of Undertakings (Protection of Employment) Regulations 2006
• consolidate 17 national minimum wage regulations
• consult in the spring on streamlining the regulatory regime for the recruitment sector, and
• create a universally portable CRB check that can be viewed online from early 2013.
As part of the response to the Resolving Workplace Disputes consultation (see link below), the Government has committed to:
• requiring all employment disputes to be offered Acas pre-claim conciliation before going to a tribunal
• increasing the qualifying period for unfair dismissal to two years from April 2012
• consulting in 2012 on ‘protected conversations’ to allow employers to have discussions with staff about retirement or poor performance, which could not be relied on in a tribunal claim
• an independent review of the employment tribunal rules of procedure, led by Mr Justice Underhill, to address concerns that tribunals have become complex, inefficient, and are no longer fit for purpose
• consulting on simplifying compromise agreements – renamed ’settlement agreements’
• considering how, and whether, to develop a ‘rapid resolution’ scheme to offer a quicker and cheaper alternative to employment tribunals
• modifying the formulae for up-rating tribunal awards and redundancy payments to the nearest pound. The Government believes this will save business GBP 5.4 million (net) a year.

In a recent speech setting out measures intended to promote economic growth, Prime Minister Cameron has indicated that the Conlib Government will consult on the introduction of ‘protected conversations’. The proposal is designed to allow employers to have frank discussions on issues such as performance, which would be inadmissible in tribunal proceedings.
In a recent speech to business leaders, Cameron stated his ambition to deregulate to create ‘fair, simple processes that are good for business and good for employees’. The effect of introducing protected conversations, would be that ‘a boss and an employee feel able to sit down together and have a frank conversation – at either’s request’. This would presumably lead to the parties attempting to agree a termination package by way of a compromise agreement if either party saw no way forward for continued employment. He noted that it would ‘help address employers’ fears of a tribunal’. And he confirmed the proposal to introduce fees for bringing claims to employment tribunals, meaning that ‘potential claimants are much less likely to pursue this option unless the employer has a genuine case to answer’.
The speech has been seen by some commentators as indicating that the more radical proposals set out in the Beecroft report – such as the introduction of ‘compensated no-fault dismissals’, for which the employer would need to give no reason – will not be introduced.

The Conlib Government confirmed its plans to raise the qualifying service for unfair dismissal from one to two years. Although this news did not exactly come out of the blue – the idea is one of a number of proposals trailed in the ‘Resolving Workplace Disputes’ consultation – the Government’s decision to make a firm announcement before publishing its response to the consultation took people by surprise.
In a press release the Government stated that the move will encourage growth and give businesses, especially small employers, confidence to take people on. It also estimated that the change, which takes effect on 6 April 2012, will save business nearly £6m a year, and that this, combined with other proposals in the consultation, should see the number of unfair dismissal claims drop by around 2,000 a year.
Ever since coming into power, the Conlib Government has been determined to give businesses some breaks, and this is one of them. One possible consequence of the change could be that individuals who are unfairly dismissed will try to shoehorn claims into a jurisdiction without a qualifying period if they do not have two years service. Of course, meritless claims should not get very far, but it will nevertheless be a headache for employers having to seek legal advice in respect of potential tribunal claims.
Like most things, it is all a question of striking the right balance, and the one-year period that currently exists arguably does that: allowing employers to assess a new employee’s abilities and giving the individual some peace of mind that he or she won’t be shown the door any minute. Raising the limit will not make much difference to recruitment if the rate of dismissals increases, and it would be a mistake to underestimate the value of job security for employees and their families, especially in recessionary times. The Government’s initiative could even partly backfire by reducing movement in the job market, as many employees with two years’ service may now think twice before jumping ship if they can be fired at will by their new employer. Such a result would obviously not suit employers, who would understandably rather have an engaged workforce.
The decision to announce an increase in the qualifying period before publication of the Government’s response to the consultation has a hasty, almost desperate feel. It remains to be seen whether this change will help kick start the recovery as some government commentators wish.

In JGE v English Province of Our Lady of Charity the High Court has held that the Catholic church could be vicariously liable for the actions of a priest, even though the relationship between them was not the same as employment. In so holding, the Court undertakes a detailed consideration of the foundation of vicarious liability and when it can apply in the context of working relationships that are not closely linked to employment.
The claimant alleged that she had been sexually abused by a priest while she was a resident of a children’s home operated and managed by a religious order of nuns. She brought proceedings against the Diocese on the basis that it was vicariously liable for the priest’s actions. It is well established that vicarious liability can arise in these circumstances. However, previous case law – for example, Maga v Trustees of the Birmingham Archdiocese of the Roman Catholic Church – has commonly involved an assumption that the church-priest relationship is akin to that of employment. Here, the Diocese challenged that assumption and refused to concede that it would be liable as if it were the priest’s employer. The High Court therefore had to determine, as a preliminary issue, whether the church could be held vicariously liable.
The High Court had to examine the basis on which vicarious liability was imposed. It accepted the Diocese’s argument that this was not a straightforward ‘akin to employment’ relationship. The lack of a right to dismiss, the church’s limited control or supervision over the way the priest fulfilled his role, and the lack of wages or a formal contract were all relevant to this conclusion. However, the court held that there was still a close connection between the priest’s (alleged) torts and his position. He was appointed by and on behalf of the Diocese in order to do its work for the benefit of the church. He was given the full authority of the Diocese to fulfill that role, was provided with the premises, the pulpit and the clerical robes, was directed into the community with that full authority and was given free rein to act as representative of the church. He had ‘immense power’ handed to him. In these circumstances, the Court considered it fair and just that the Diocese be held responsible for his actions. It accordingly allowed the claim to proceed.

The Conlibs in early Oct announced that the qualifying period for the right to claim unfair dismissal will be extended from one to two years on 6 April 2012. The Conlibs announcement pre-empts its response to its consultation ‘Resolving Workplace Disputes’, which proposed the increased qualifying period. While business groups have welcomed the move, some commentators have expressed concern that the change may lead to an increase in the number of discrimination claims, for which there is no qualifying period.
The Conlibs claim that increasing the period to two years, combined with other proposals in the ‘Resolving Workplace Disputes’ consultation, should see the number of unfair dismissal claims drop by around 2,000 per year. The Govt view is that by making it easier to dismiss employees will encourage the private sector to hire staff and thus spark economic recovery. Other proposals set out in the consultation included a fee for lodging tribunal claims. In his speech to the Conservative party conference today, the Chancellor of the Exchequer indicated that such a fee will be introduced from April 2013. The Government has also published a discussion paper on ‘promoting economic growth through a strong and efficient labour market’ which seeks views on how the Government can ensure that the UK labour market is flexible, effective, fair, and supports growth.

The Conlib Government has announced that the qualifying period for the right to claim unfair dismissal will be extended from one to two years on 6 April 2012. The announcement pre-empts its response to its consultation ‘Resolving Workplace Disputes’, which proposed the increased qualifying period. While business groups have welcomed the move, some commentators have expressed concern that the change may lead to an increase in the number of discrimination claims, for which there is no qualifying period.
The Conlibs claim that increasing the period to two years, combined with other proposals in the ‘Resolving Workplace Disputes’ consultation, should see the number of unfair dismissal claims drop by around 2,000 per year. Other proposals set out in the consultation included a fee for lodging tribunal claims. In his speech to the Conservative party conference today, the Chancellor of the Exchequer indicated that such a fee will be introduced from April 2013.

The annual statistics for employment tribunals and the Employment Appeal Tribunal (EAT) for April 2010 to March 2011 have been published. The statistics show an 8 per cent fall in the number of claims received by tribunals when compared with 2010, and a 9 per cent rise in the number of disposals. Conversely, the number of appeals to the EAT rose slightly while its disposals fell.
The statistics, published by HM Courts and Tribunals Service, also reveal that:
• the number of single claims received has fallen 15 per cent over the period in question
• the number of unfair dismissal and redundancy claims has fallen slightly – possibly as a result of the improving economic climate
• claims under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 have nearly tripled
• age discrimination claims have risen 32 per cent, bucking the trend for other protected characteristics, and
• the median award of £12,697 for age discrimination claims is the highest of the discrimination strands, with all others around £5,000 and £6,000.
The reduction in the number of tribunal claims and the increase in the number of disposals appears to run counter to the idea held by some that the number of tribunal claims is rising inexorably and ‘clogging’ the system . However, the drop must be seen in the context of a surge in claims in the previous reporting year, where claims increased 56 per cent, thought to be due to a mixture of increased multiple claims and economic factors.

In Garside and Laycock Ltd v Booth the Employment Appeal Tribunal has decided that an employment tribunal misdirected itself in finding that it was unfair to dismiss an employee who refused to accept a pay cut. In remitting the case to a fresh tribunal, the EAT stressed that in addition to considering whether, in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating the refusal to accept a pay cut as a sufficient reason for dismissing the employee, a tribunal should also consider whether the dismissal ‘was in accordance with equity’. This may involve a consideration of matters such as whether management have also been subjected to a pay cut.
GL Ltd decided that, in order to avoid redundancies, it needed to cut its workforce’s salary by five per cent. B refused to agree to a variation of his contractual terms relating to pay, and was dismissed for that refusal. He brought a claim of unfair dismissal which was upheld by an employment tribunal on the basis that it was reasonable for B to seek to maintain his terms and conditions. GL Ltd appealed.
The EAT held that the tribunal erred in two important respects. Firstly, it had wrongly considered the reasonableness of the employee’s decision to reject the pay cut, rather than whether the employer was reasonable to have dismissed B for not accepting the reduction. Secondly, the tribunal had completely misunderstood the ratio of the EAT’s decision in Catamaran Cruisers Ltd v Williams and ors: that case had rejected, not supported, the argument that whether a dismissal for refusing a pay cut is fair will depend on whether the employer was in a situation so desperate that the only way of saving the business was to propose stringent reductions in pay and conditions.
Having held that the case would be remitted to a fresh tribunal, the EAT gave guidance on the correct approach for tribunals to take when dealing with such dismissals. In assessing reasonableness, a tribunal must look at the circumstances in S.98(4)(a) Employment Rights Act 1996 – i.e. whether, in the circumstances (including the size and resources of the employer’s undertaking) it was reasonable to treat the refusal to agree to a contractual variation as sufficient to dismiss the employee. It should not, however, be overlooked that that S.98(4)(b) also requires the tribunal to consider whether the dismissal was ‘in accordance with equity’. The EAT considered that this may have particular force where, for example, management proposes a cut to workers’ pay, but not to its own.