Welcome to the Summer 2013 edition of the
BHW Employment Law Newsletter.
The Government has introduced several key
reforms and amendments in employment law over
the last few months.
One of the most signiﬁcant
changes is the introduction of
fees in the Employment Tribunal.
The new fee structure, which
came into force on 29th July
2013 is a positive change for
employers. For more information
on this please read our feature
article at page 4.
‘Protected conversations’, introduced
as ‘Conﬁdential Pre-Termination
Negotiations’ can now be used when
bringing an employment relationship
to an end. How will this work in
practice? Turn to page 5 for more
Page 6 of this issue covers the new
employment status of Employee
The Agricultural Wages Board (AWB)
has now been abolished but what
does this mean for those employing
staff in this sector? Page 7 of this
issue covers life after the AWB.
Finally, we take a look at what is to
come in 2013 at page 8 with our
If you have any questions relating to
the articles featured in the Newsletter
or would like advice on a particular
query you may have, please do not
hesitate to contact me to discuss
Head of Employment
0116 281 6237
Inside this issue
Employment Law 3
It will now cost an
employee to bring
a claim against you
Introduction of fees in the
Employment Tribunal 4
Managing staff without
the threat of
legal proceedings 5
Employee Shareholders 6
Life after the
Wages Board 7
Legislation update 8
BHW Employment Law
Changes in Employment Law
The Employment Rights Act 1996 was amended to reﬂect
the fact that a disclosure will only be protected if the
employee reasonably believes that the disclosure is made
in the public interest. In addition, a disclosure will no longer
have to be made in good faith.
It is important to ensure that your Whistleblowing Policy
covers protected disclosures made “in the public interest”.
From 25th June 2013, a “qualifying disclosure” means
any disclosure of information that, in the reasonable belief
of the worker, is made in the public interest. Employers
are advised to amend the relevant section of the existing
Whistleblowing Policy that explains explains what
constitutes a protected disclosure.
Unfair Dismissal Compensatory Award
At present unfair dismissal awards are made up of a
statutory basic award and a compensatory award. The
basic award is essentially what an employee would receive
if they were made redundant.
Since Monday 29th July 2013 the compensatory award in
most types of unfair dismissal cases has been capped at
52 weeks’ pay or £74,200, whichever is lower.
This cap only applies to employees who were dismissed
on or after 29th July 2013.
The calculation of a years’ pay will be based on the
statutory deﬁnition of “a weeks’ pay”. Basically this
means the gross salary ﬁgure (i.e. before tax and National
Insurance Contributions) however, pension contributions,
beneﬁts-in-kind and discretionary bonuses will be
The Department for Business Innovations and Skills (BIS)
has indicated that the median will be somewhere between
£26,000 and £78,000.
There will also be new rules on interest which will mean
that interest will accrue on tribunal awards from day one,
unless they are paid in full within 14 days.
Employment Appeal Tribunal procedure
The composition of the Employment Appeal Tribunal will
change to one judge sitting alone to hear appeals.
Unfair dismissal and political opinion
The reforms introduced by the Enterprise and Regulatory
Reform Act 2013 have removed the two-year qualifying
period for unfair dismissal protection where the main
reason for the dismissal is the employee’s political opinions
or afﬁliations. It is not intended to be a new basis for
discrimination or an automatic unfair dismissal claim.
The fairness of the dismissal will be based on whether
the employer followed a fair procedure on the grounds of
some other substantial reason.
When employment tribunals
were created in the 1960s,
legal representation was
discouraged. The focus was
on providing a free service for
employees who felt they were
being treated unfairly in the
What went wrong?
The difﬁculty came with the
increasingly complex case law which
created uncertainty around people’s
rights. Employers felt that they were
being put to unnecessary expense
defending groundless claims which
were sometimes more cost effective
to settle than run to hearing. This was
particularly the case where employees
were not legally represented.
To try and redress this the coalition
government announced in 2011
that it would introduce fees for
people wishing to bring a claim in
the employment tribunals and the
Employment Appeal Tribunal. As
always, there was a cost saving
element to the reforms as the
government wanted people who used
the service to cover more of the cost
of running it.
So what will happen?
From Monday 29th July 2013,
employees will be asked to pay two
fees. The ﬁrst fee will be called the
issue fee and must be paid when the
claim form (ET1) is lodged with the
Tribunal. The second is a hearing fee;
this will be due 4 -6 weeks before the
hearing. How much this fee will be
depends on the type of claim.
How much will it cost?
Claims will be placed in one of two
categories. Type A is for the more
straightforward claims such as
failure to pay entitlements under an
employee’s contract e.g. holiday
pay, notice pay etc. Such claims will
attract a £160 issue fee and a £230
hearing fee. Type B is likely to be more
common as it covers claims for unfair
dismissal, discrimination and equal
pay. Type B claims will attract a £250
issue fee and a £950 hearing fee.
Claims involving multiple employees
(known as group action claims) will
attract a group fee which is divided
between the group.
Can this be stopped?
Unsurprisingly, the Unions feel that
the introduction of fees is unfair.
UNISON and Fox and Partners have
therefore applied for judicial review
of the decision stating that the fees
prevent employees exercising the
rights given to them by law. On 9th
July 2013, Fox’s application for an
interim interdict (injunction) was
rejected. However, the matter has
been set for a full hearing which is
expected later this year. The Ministry
of Justice have agreed that if the
decision goes against them, they will
repay any money which has been
received. So can this be stopped,
It will now cost an
employee to bring
a claim against you
Introduction of fees in the Employment Tribunal
Compromise Agreements were re-named
Settlement Agreements on 29th July 2013.
So apart from the name, what’s
Under the Enterprise and Regulatory
Reform Act 2013, employers and
employees will be expected to
have conﬁdential pre-termination
negotiations (protected conversations)
to bring employment to an end. The
idea is to allow employers to effectively
manage their workforce, without
the threat of legal proceedings. Of
particular note is the fact that when
an offer of a settlement agreement
is made to an employee, they will
not be able to disclose this fact to
an Employment Tribunal should they
decide to reject the offer and pursue a
claim for unfair dismissal.
What protection has been built
into the Bill to protect employees?
Essentially, only discrimination or
evidence of ‘improper behaviour’ will
be sufﬁcient to enable an employee
to bring the offer of a settlement
agreement to the Tribunal’s attention.
There is no speciﬁc guidance on
what ‘improper behaviour’ would be,
but ACAS have issued a draft code
which sets out some fairly straight
forward advice on the matter. One of
the recommendations they make is to
give an employee 7 days to consider a
potential settlement offer. This should
give the employee sufﬁcient time to
seek independent legal advice before
accepting/rejecting the offer.
What about from the employer’s
The change was put forward by
business secretary Vince Cable to
try and make sure ‘that the right
conditions are in place to encourage
investment and exports, boost
enterprise, support green growth
and build a responsible business
culture.’ It could be argued that the
changes bring about a refreshingly
honest approach to terminating
employees contracts. However,
practitioners are concerned about
how protected conversations will
work in reality. Until the provisions
have been fully tested, we do not
know what is meant by ‘improper
behaviour’. The consequences of
falling foul of this provision will be to
make conversations in relation to the
settlement agreement admissible in a
subsequent Employment Tribunal.
In theory the new regime should make
it easier for employers to manage
their workforce. However, our advice
would be to proceed with caution.
This is because the term ‘improper
behaviour’ has not yet been fully
deﬁned. An employer could therefore
ﬁnd themselves in a situation where
an employee who refuses to sign a
Settlement Agreement, could submit
the contents of their negotiations
and the draft agreement as evidence
against them in any subsequent
Managing staff without the
threat of legal proceedings
A new type of employment
status will be created
under the Growth and
Infrastructure Act 2013
(Commencement No. 3
and Savings) Order 2013,
which came into force on
1st September 2011.
The status of employee shareholder
will allow employees to give a bundle
of employment rights (e.g. unfair
dismissal and statutory redundancy)
in exchange for an award of shares
worth at least £2,000.
The employee will have a right to
a statement detailing the shares, a
requirement for the employee to take
legal advice (the employer will pay for
this up to a “reasonable” level) and a
seven day cooling off period.
What does this mean for
The practical impact of these
changes is unclear.
Any company with share capital
can enter into an agreement with an
employee to allow them to become
an “employee shareholder”.
An employee shareholder will receive
fully paid-up company shares that
have a value of no less than £2,000
on the day of issue.
In exchange for these shares the
employee shareholder will give up the
it breaches the Equality Act 2010,
or breaches H&S legislation or is
automatically unfair under ERA);
If an employee shareholder goes
on maternity, paternity, adoption or
parental leave the notice that they
will need to give to return to work will
increase to 16 weeks.
Employers will be able to make a
job offer conditional on an applicant
agreeing to become an employee
shareholder. If an applicant refuses
the employer can lawfully withdraw
The statement that the employer
must provide the employee
shareholder with must contain the
shareholder is giving up;
e.g. voting and dividend;
on the transfer of the shares; and
subject to drag-along or tag-along
The employee must not suffer a
detriment for refusing to accept
the offer to become an employee
It is not clear how the Transfer
of Undertakings (Protection of
Employment) Regulations (TUPE)
2006 will apply to employee
shareholders or indeed existing Share
Employers will also need to be careful
that the introduction of employee
shareholders in their company does
not create a two-tier workforce of
employee shareholders and non-
The current AWO 2012
will remain in force until 1st
From 1st October 2013 employers
will be free to engage new workers
on terms and conditions that comply
with national legislation, e.g. the
Working Time Regulations (WTR)
1998 and the National Minimum
Wage (NMW) Act 1998.
What does this mean for
Employers will need to consider the
terms and conditions of existing
employees and that of new recruits.
Before considering making any
changes employers may wish to
consider the following:
salaries. From 1st October 2013
it will be easier for employers to
design salaries as long as they
comply with the NMW.
AWO 2012 grade 1 -6 apply for
employees employed before 1st
October 2013. For employees
taken on after 1st October 2013
the National Minimum Wage
currently ﬁxed by the grade as set
out in the AWO 2012. There is no
statutory provision for overtime to
be paid at a higher rate. Therefore
after 1st October 2013 employers
will not be required to pay overtime
for new employees.
employed before 1st October
2013 the hourly pay must not be
below the minimum hourly rate for
the grade as set out in the AWO
2012. Employers must calculate
and pay a ‘fair’ piece rate which is
the same rate as the NMW for a
worker taken on after 1st October
(ASP) is payable to employees
after after 12 months service and
is paid at the minimum rate for
their grade under the AWO 2012.
For employees taken on after 1st
October 2013 Statutory Sick Pay
(SSP) is payable if the employee
meets eligibility requirements.
are expressly deﬁned in the AWO
2012 and calculated on the
number of days worked each
week (e.g. 5 days per week =
31 days per year, including bank
holidays.) There are rules on how
much holiday can be carried
over from year to year and how
much can be bought out etc.
For employees taken on after 1st
October 2013 the current statutory
holiday entitlement of 5.6 weeks
pa (e.g. 5 days per week = 28
days inclusive of bank holidays.)
overtime rate (1.5 x hourly rate)
applies if an employee works on a
bank holiday. For new employees
taken on after 1st October 2013
there is no statutory requirement to
pay overtime rate if an employee
works on a bank holiday.
maximum deductible is set out in
the AWO 21012 and subject to the
NMW Regulations and the worker
having worked a minimum of 15
hours in any particular week. The
offset rate for accommodation
charges £4.91 per day (from 1st
October 2013). If an employer
charges more than this, the
difference is taken off the worker’s
pay. No 15 hour minimum applies.
Life after the Agricultural
Wages Board (AWB)
The Agricultural Wages Board (AWB) which determines the
Agricultural Wages Order (AWO) in England and Wales was
abolished on 25th June 2013.
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