I was recently asked to deliver a presentation on the new laws that are coming into force in 2012 and how they will affect business owners.

Following positive feedback from the business people present at the event, I thought it would be useful to summarise the presentation into a series of blog posts on the key changes to the law coming your way soon. The first of these concentrates on an area of law that is a great cause of concern for many business owners – employment law.

Employment Law Changes – Coming into Force 1st April 2012

 Unfair dismissal qualifying period to be increased

  • The qualifying period for unfair dismissal claims will be increased from one to two years.
  • It is unclear at this stage whether the new qualifying period will apply to existing employees or only to new joiners. However, common sense would suggest the latter of these will apply
  • There will continue to be no qualifying period for discrimination and whistleblowing claims.

Employment tribunal reforms

  • Deposit orders. The amount of the deposit a tribunal will be able to order a party to pay will increase from £500 to £1,000.
  • Cost awards. The maximum amount of costs a tribunal can award (without referring the case to the county court for detailed assessment) will increase from £10,000 to £20,000.
  • Witnesses. Tribunals will be given powers to direct parties to bear the costs of witness attendance, including the costs of witnesses called by the successful party. The government will withdraw state-funded expenses.

Employment Law Changes – No Date Announced as Yet

Acas conciliation

  • Claimants required to submit details of their dispute to Acas first, whereupon they will be offered pre-claim conciliation for a period of one month. If conciliation is refused by either party, or is unsuccessful, claimants can then take their claim to the employment tribunal.
  • If the parties enter into conciliation, this will “stop the clock’ on the limitation period to present the claim to the employment tribunal.
  • The claimant will have one month after the conclusion of conciliation to present their claim to the employment tribunal.

Financial penalties for employers

  • Introduction of financial penalties for employers who lose at an employment tribunal Expected to equate to half of the total award made by the employment tribunal, with a minimum threshold of £100 and a maximum cap of £5,000.
  • Where a non-financial award is made, the employment tribunal will be able to ascribe a monetary value.
  • The levy of a financial penalty will be at the employment tribunal’s discretion; it will not be automatic.

As an advisor to business owners in the region, I hear many horror stories about employee issues that have led to costly and stressful employment tribunal hearings. It is important to remember that when it comes to employing staff, following what you consider to be the ‘right’ or even ‘moral’ course of action, is not necessarily correct within the eyes of the law.

If you have an issue with any of your employees at the moment, or need any advice in relation to how to manage employees’ conduct within the law, please do not hesitate to contact one of our employment solicitors.

Next time, the Localism Act and the impact on communities, the construction sector and planning regulations’¦.