2012 Employment Law Update

from ContractStore contributor Judith Long

The last 12 months have seen some significant changes in Employment Law. For example, from 6 April 2012, the qualifying period for unfair dismissal claims will be increased from one to two years.

Certain other notable changes are as follows:

On 1 February 2012 new award limits come into force. The maximum unfair dismissal compensatory award rises from £68,400 to £72,300 and the maximum amount of a week’s pay for the purpose of calculating a statutory redundancy payment and the basic and additional awards for unfair dismissal increases from £400 to £430.

On 6 April 2012 changes to tribunal procedure come into force. The changes were announced in the Government’s response to the consultation on workplace disputes (on the BIS website).

Fees for tribunal claims are to be introduced by no later than December 2013. Employees who wish to bring an employment tribunal claim against their employer are required to pay a fee. The fee will be repaid to the employee only if he or she is successful with his or her claim.

Some key issues for businesses in contract negotiations
A recent Court of Appeal decision illustrates the dangers for businesses of relying on conversations and unsigned draft agreements. The case highlights the importance of making sure that key contractual provisions are always documented, especially those as fundamental as a termination right.

Assured shorthold tenancy converted into assured tenancy in error
A Court of Appeal decision provides a warning to landlords who have multiple residential properties on their books. The Court held that a letter sent in error by a landlord’s employee constituted a notice, the effect of which was to convert the tenant’s assured shorthold tenancy (AST) into an assured tenancy. Landlords should ensure that they have effective procedures in place to enable them to communicate with their tenants and avoid similar errors.

Selecting the right reason when dismissing an employee
A case in the Employment Appeal Tribunal (EAT) highlights the importance for employers of carefully considering whether an employee’s failure at work is misconduct or a lack of capability matter before taking any formal action against them that could lead to their dismissal. The EAT held that an employment tribunal was entitled to find that an employer had fairly dismissed for conduct despite the fact that it had pleaded capability as the reason for dismissal in the ET3 at the hearing.

In this case, the change in the reason for dismissal caused no prejudice to the employee and the tribunal was therefore entitled to find that the dismissal was fair. The employer, however, was fortunate in this case. If the tribunal had found that the reason for the dismissal was capability and the employer had relied on misconduct, it is likely that the tribunal would have found the dismissal to be unfair, as no capability procedure had been followed.

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