6 April 2014 – “Need to Know”

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A raft of new legislation comes into force on 6 April, which is now only a matter of weeks away. We look at what employers ‘need to know’ in advance of this date.

ACAS early conciliation
The new ACAS early conciliation (‘EC’) scheme launches on 6 April and will operate on a non-compulsory basis from that date until 5 May when it will become compulsory. In a nutshell, employees must have contacted ACAS under the rules of the EC scheme before they will be permitted to file a claim with the Employment Tribunal. An ACAS conciliator will contact the prospective respondent to see whether there is any scope for conciliation but, importantly, there is no obligation on either the prospective claimant or respondent to actively engage in conciliation discussions if they do not want to. If, however, the parties do wish to attempt to conciliate then the EC period can last for up to a month (with a possible 2 week extension if both parties agree). At the end of the EC process, ACAS will issue the claimant with an ‘EC certificate’ containing a reference number that the claimant must include on any future Tribunal claim (without it the claim will be rejected). The time limit that the claimant has to bring the claim to Tribunal is effectively ‘put on hold’ whilst EC is ongoing.

What does this mean for employers?

EC introduces an additional step that a claimant must go through before bringing a claim. In conjunction with Tribunal fees it may have the effect of dissuading some employees from bringing claims. Arguably it provides employers with an opportunity to put forward their strongest arguments to dissuade employees with unmeritorious or ‘nuisance’ claims and also to nip any problematic or sensitive claims in the bud at an early stage.

On a practical note, it is possible that ACAS might contact an employee’s manager directly if the employee has named them on the EC form. As such, employers may wish to take this opportunity to remind managers and team leaders that any contact from ACAS should be referred to HR and they should not attempt to engage in any conciliation discussions without appropriate authorisation/support.

Financial Penalties
From 6 April, Employment Tribunals will have the power to award a financial penalty against an unsuccessful employer where there have been ‘aggravating features’. The penalty can be between £100 and £5,000 and must be 50% of any award made to the employer up to the maximum of £5,000. The penalty is paid to the Government, not to the employee.

What does this mean for employers?

It is not yet clear how the tribunal will identify an ‘aggravating feature’ but it is likely to involve some element of serious procedural breach, malice or bad faith rather than a genuine error or minor procedural slip up. Breaches of the ACAS Code of Practice on disciplinary and grievance procedures already carry the risk of an uplift in compensation. This makes it doubly important to ensure that HR processes (including anti-harassment and bullying, equal opportunities, disciplinary, grievance and dismissal procedures) are adhered to. Employers may wish to update their HR training to include the new financial penalties.

Discrimination Questionnaires abolished and replaced with new ACAS guidance
Employers will be mostly relieved that discrimination questionnaires are to be abolished from 6 April as they were notoriously unwieldy and onerous to deal with. ACAS has published new guidance for employers on dealing with questions of discrimination received from employees which takes effect from 6 April 2014.

What does this mean for employers?

Whilst it is true that the existing ‘questionnaire’ procedure has been relaxed (i.e. no statutory time limits for answering questions and no ‘adverse inferences’ can be drawn from a failure to reply or an evasive reply) the Tribunal can still take account of an employer’s failure to comply with the new ACAS guidance so caution should still be exercised.

Limits on tribunal awards to increase
The maximum compensatory award for unfair dismissal will rise from £74,200 to £76,574 (subject to a ‘cap’ of a year’s gross pay) from 6 April. The maximum amount of a week’s pay (used to calculate redundancy payments and the basic award of compensation for unfair dismissal) also rises from £450 to £464.

Remember that the maximum compensatory award an employee can recover in an ordinary unfair dismissal claim is the lower of a year’s gross pay or (from 6 April) £76,574. In reality, awards at these levels are rare so the limits can give employees unrealistic expectations about how much they will recover if they succeed in their claim. By way of example, the median unfair dismissal compensatory award for 2013 was £4,832.

Extension to flexible working rights by 30 June 2014
The extension of flexible working rights to all employees with at least 26 weeks’ service (i.e. not just those with caring responsibilities) had been delayed from its original implementation date of 6 April 2014 but the Government has now confirmed that this extension will be brought in by 30 June 2014. There will also be a new ACAS Code of Practice on ‘dealing with flexible working requests in a reasonable manner’ which is a more relaxed and straightforward version of the existing statutory request procedure.

What does this mean for employers?

We strongly recommend that employers update their flexible working policies in line with the new statutory regime. The consequence of not doing so will be that employers may well be required by their own internal procedures to go further than the law requires them to when dealing with flexible working requests. Please contact us if you would like further advice or assistance with this process.