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Employment Law Changes

15th August 2013

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Time to make a change…

Unless you have been avoiding newspapers, television, radio and even internet news sources, you will be aware that the Government have made some big changes to employment law and legal aid. We have been speculating about how the changes will affect our callers with their legal issues and we are now beginning to see some emerging trends.

Changes to Legal Aid have resulted in a significant rise in the number of family law calls. Most people can no longer recieve funding for divorce, custody or residence issues. We are getting more requests for guidance on how to access free resources and self help options.

Welfare Reforms have also resulted in a rise in callers needing welfare and benefits advice. Many of them have also been hit by the changes to legal aid. 

Employment Law Changes have been well documented but in brief:

Compromise Agreements have been renamed Settlement Agreements. The name change comes with new guidance which you can see here: 

We have already had calls about this and speculate that some employers were perhaps just waiting until the conversation they wanted to have was lawful!

The compensatory award for unfair dismissal has been capped at 52 week’s pay or £74,200, whichever is lower. According to BIS, the average award in an unfair dismissal claim is £5,000, so this is unlikely to make much difference to the majority of claimants. We have yet to see any trend of employers using this cap to make more ‘commercial’ decisions.

Tribunal fees are now payable by claimants unless they qualify for fee remission. Fees range from £390 for simple matters to £1,200 for more complex matters. Any fees might be recoverable if you win at Tribunal. A fact sheet on the fees and the payment process can be found here:

We have yet to detect any real trend of employers or employees dealing with matters any differently as a result of the new fees. There is a concern, however, that in the long term some employees may be significantly disadvantaged.

Settlement Agreement discussions about terminating an employee’s employment will be inadmissible as evidence in cases of unfair dismissal, unless there has been “improper behaviour”. ACAS has some examples of “improper behaviour” (see here), but it is not an exhaustive list. We predict that there will be litigation on this point. The safest course is to assume that anything you do or say may end up being used in an Employment Tribunal!

Employment Tribunal procedures have been changed to make them easier to understand and to increase Tribunal efficiency. There is more guidance on the Ministry of Justice site here: 

We are still waiting to see what impact, if any, the new rules will have.

Employee Shareholder Status has been introduced. We have not heard from any employers or employees yet about this. We would advise caution when considering giving up employment rights for shares (even if they are worth at least £2,000). The potential employee shareholder and their employer also need to fulfil 6 conditions – miss any of them, the employee will not become an employee shareholder. There are more details here:

There are plenty of changes still to come. Here are just a few we expect more news on (including potential implementation dates) over the next few months:

  • Changes to the TUPE rules regarding changing service providers, expected early 2014.
  • Changes to the Equality Act (including the removal of the provisions on third party harassment, to be implemented on the 1st October 2013).
  • Fines for employers who have behaved negligently, or maliciously, or whose actions have “aggravating factors” and who lose at Employment Tribunal. These are expected to be introduced in Spring 2014.
  • Criminal legal aid reforms have yet to be finalised and consultation is currently taking place.



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