Government's efforts to spur economic growth
lengthen the qualifying period for unfair dismissal claims and
streamline Employment Tribunal procedures.
In April 2012, a number of changes to UK employment law will be
introduced. This LawFlash explains the changes and examines the
possible implications for UK employers.
The current UK government launched its Growth Review in November
2010, which aims to further economic prosperity in the UK. As part
of this effort, the government intends to change the UK's often
lenient employment law to remove barriers to recruitment and
support employers' and employees' efforts to resolve
disputes at an earlier stage. The government also wants to ensure
that businesses feel more confident when hiring new staff.
The government launched a consultation on Resolving Workplace
Disputes in January 2011, which led to a number of proposed
changes. This April, the first of those changes will come into
Key Change: Unfair Dismissal
On 6 April 2012, the qualifying period for unfair dismissal will
increase from one to two years. This means that new hires will have
to wait longer to receive statutory protection against unfair
The change only affects new staff employed on or after 6 April
2012. As such, a number of employers will have taken advantage of
this change by postponing start dates until after 6 April.
It is anticipated that employees who do not meet the service
requirement but who want to bring a claim in any event may use
other routes — such as discrimination or whistleblowing
— to ensure their claims are not barred by this change in
the law. This practice already happens with employees who do not
meet the one year service requirement and, therefore, the
incidences of other claims with no minimum service requirements may
The rest of the April 2012 changes affect Employment Tribunal
practice and procedure and, as such, their impact on employers may
not be felt immediately. The changes are summarised below and will
affect all cases presented on or after 6 April 2012 or, in the case
of judges sitting alone on unfair dismissal claims, all cases heard
on or after 6 April 2012.
Witness statements will be "taken as read" unless the
Employment Tribunal directs otherwise. This means that the
Employment Tribunal will read the statements rather than have the
statements read out loud to the Tribunal by the witnesses. This
change should speed up proceedings.
The maximum amount of costs an Employment Tribunal can award
will increase from £10,000 to £20,000. In addition, the
rules on deposit orders — which a party can be ordered to
pay if their case has little reasonable prospect of success
— will be changed to increase the maximum deposit from
£500 to £1,000. As both cost awards and deposit orders
are rarely made by Tribunals, the effect of these changes may be
minimal. However, it should increase their deterrent value.
Employment Tribunal judges will sit alone on unfair dismissal
claims without any lay members unless the judge orders otherwise.
Currently, two lay members sit alongside the judge. Typically,
however, a claimant will bring a number of Tribunal claims rather
than just an unfair dismissal claim alone; hearings of those
multiple claims will not be affected by the change.
The payment of state-funded expenses for a witness's
attendance at the Tribunal will be withdrawn. As an alternative,
Employment Tribunals will have a general discretion to order any
party to pay any witness's expenses. The government had
envisaged that only parties calling a witness pursuant to a witness
order could be ordered to cover that witness's costs, but the
amendment instead gives the Tribunals general discretion.
A number of future changes have also been proposed, including
the introduction of fees for bringing a claim, a focus on early
conciliation of claims by ACAS (the UK's Advisory, Conciliation
and Arbitration Service), and financial penalties for employers
that lose Tribunal claims. Morgan Lewis will bring you further
LawFlash updates as these changes are introduced.
Copyright 2012. Morgan, Lewis & Bockius LLP. All Rights
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and it should not be construed as imparting legal advice on any
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The term employer covenant refers to the legal obligation, ability and willingness of a pension scheme's sponsoring employer (or a number of employers) to provide the requisite funds in order to meet the scheme's liabilities both at present and in the future.
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