New employment laws – legal update for business owners, managers and business advisers

Early Conciliation

Early Conciliation (“EC”) came in to effect on 6/4/14. EC will be compulsory with effect from the 6 May 2014, but is voluntary between 6th April and 5th May 2014. EC requires an employee who wishes to bring a claim against their employer in the Employment Tribunal (“ET”) to try to settle the case first of all via Acas.  In the past, the first time an employer would know if a claim had been made against them, would be when the ET papers landed on their desk. This will not be the case, particularly from 6/5/14.

It is now very important that you take care when receiving a call from Acas. Acas (for various reasons) will often not try to involve themselves in the strengths and weaknesses of any claim and neither will they give a claimant any advice or assistance in understanding what is a realistic value of their claim, this is not part of their remit.  They will in effect simply pass on the views of the claimant about the merits of the case and the compensation which the claimant wants even if this is without merit and outside any of the principles which would be applied by an ET.

It is therefore very important that if you or you receive any telephone calls from Acas that you recognise how important these negotiations might be.  It is extremely important to ask for legal advice because it is only with the benefit of that advice, will you as the employer be able to understand the claims which the employee might bring and just as importantly how much an ET might award in compensation if the claim is successful.

In short therefore these telephone calls from Acas are much more important than they might seem but it is just as important to recognise that on many occasions Acas will simply be passing on the views of a potential claimant without any sort of sift or vetting process whatsoever.  In order to make the potential claimant realise what is realistic and what is utterly unrealistic it is likely that  much work will have to be done which Acas are not going to be willing to carry out.

Therefore if you receive a call from Acas, please make a note of the name of the Acas officer, their telephone number and the name of the employee/ex-employee who is wanting to commence a claim and then please do call me for further advice. 

In summary therefore, from the 6th May 2014 the first that you will know about a claim being made against you in the ET will be when you receive a call from Acas, not the Claim Form being received. If there is the potential for other people to receive such a call, such as line managers, please make them aware of this too. From this date all claimants will be required to contact Acas in order to engage in mandatory EC before they are allowed to lodge a claim in the ET. As of today, Claimants have the option of asking for EC leading up to the 6/5/14.

Please be aware, you are not obliged to take part in EC if you do not wish to. Again this is something I can discuss with you at the time.

Auto-enrolment

I have received a lot of queries regarding auto-enrolment recently. You may well have it all in hand. The main point about the legal requirements are that that all employers in the UK must automatically enrol eligible jobholders (not just employees) in a pension scheme from a date after 1 October 2012. Under a five-and-a-half-year staging process, employers must enrol eligible jobholders in a qualifying pension scheme or the National Employment Savings Trust (NEST), unless they are already members of a qualifying scheme.

A recent article (http://bit.ly/1lqh4sZ) suggests that employers are not planning early enough in terms of the administration, software and financial impact of auto-enrolment. 

I just wanted to flag this up to you. Whilst I would not be the person to advise you on the most appropriate pensions providers, salary sacrifice options available to you (which may be a cost effective way of approaching auto-enrolment), I can put you in touch with people who can provide that specialist advice. Many businesses assume their accountant will have the matter in hand, but this will not always be the case. I would of course be on hand to advise on the employment law implications, if/when needed.  The main reason for me mentioning this to you is that pensions advisers need time to work on your auto-enrolment provision, it is not something that can be done very well (if at all) at the last minute.

Financial penalties for employers who lose at the ET.

New powers came into force with effect from the 6/4/14 giving tribunals the power to order an employer who has lost at tribunal to pay a financial penalty of up to £5,000 to the Secretary of State, where the case has “aggravating features”.  “Aggravating features” has not been defined therefore we can at his stage only refer back to similar legal tests and the guidance (which is minimal) that has been issued at this stage.