Lynda Macdonald, freelance employment law trainer, consultant and author looks at the key developments expected in employment legislation in 2008.

Although 2007 was a relatively quiet year in respect of new employment legislation, readers should not be lulled into thinking that this represents a settled pattern for the future. There are key developments in the pipeline which are likely to result in major changes, in particular with regard to dispute resolution procedures and the way in which discrimination legislation is structured. Whilst ongoing developments on these are expected during 2008, other more imminent changes will occur this year. These various developments are explained below.

The first important legislative development to be aware of for 2008 is the introduction of new increased penalties for employers who, whether unintentionally or deliberately, employ illegal workers. This is part of a much larger scheme to overhaul and strengthen the UK’s immigration laws. As from 29 February 2008, employers whose negligent recruitment practices lead to the recruitment of foreign nationals who do not have the right to work in the UK will be liable to fines of up to £10,000 for each illegal worker found in their business. This is double the previous figure.

Furthermore, under the Immigration, Asylum and Nationality Act 2006, employers who knowingly recruit illegal migrants will face prosecution under a new criminal offence leading to unlimited fines and the possibility of a prison sentence of up to two years. The Government has published a Code of Practice to accompany the changes, together with guidance for employers on how to avoid race discrimination when checking that prospective or existing employees have the right to work in the UK.

Part of the long-term plan to overhaul the laws on immigration is the proposal, already underway, to reconcile most of the existing schemes under which non-EEA nationals can work in the UK into a new merit-based points system. The system for obtaining work permits is also to be changed radically. Once the changes are implemented, non-EEA nationals who require work permits will have to obtain them from the overseas embassy in their home country, sponsored where appropriate by their prospective employer. Employers who wish to sponsor work permit applications will need to obtain a licence and will have to agree to fulfil certain duties and responsibilities to earn and keep that licence.

A much less daunting prospect for the more immediate future is the routine increase to tribunal award limits that takes place at the beginning of February each year. The new maximum amount for a “week’s pay” for the purpose of calculating the basic award for unfair dismissal and redundancy pay increases from £310 to £330. Correspondingly, the maximum basic award and maximum statutory redundancy payment rises to £9900. The compensatory award for unfair dismissal goes up from £60,600 to £63,000.

Moving on to April 2008, the Information and Consultation of Employees Regulations 2004 (ICE Regs) will begin to apply to employers who employ between 50 and 99 employees. When the Regulations were first implemented, they affected only employers with 150 or more staff, but were extended in April 2007 to employers with 100 or more employees. Employers who are about to come within the scope of the Regulations should be aware of their provisions.

A parallel provision, also to be implemented in April 2008, is the duty under the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 for employers with 50 or more employees to consult with current and prospective members, or their representatives, on any significant proposed changes to their pension schemes. The consultation period will have to be at least 60 days and this will have to be completed before any changes can be introduced. Like the ICE Regulations, these provisions previously applied only to employers with 100 or more staff.

April will also see the implementation of the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2007 which will reduce certain regulatory burdens on employment businesses and increase protection for work-seekers.

The Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6 April

The Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6 April after a very long drawn-out passage through Parliament. Under the Act, an organisation (as opposed to an individual) can be found guilty of manslaughter in circumstances where negligent management practices have led to the death of an employee or other person. The penalty upon conviction is an unlimited fine. The Act will not, however, provide for individual senior managers to be sent to prison, although prison sentences for individuals can still be imposed under other pre-existing legislation.

Thinking ahead to the longer-term future, the Government is expected to consult at length during 2008 on the Employment Bill, published in December 2007, with a view to finalising it towards the end of the year. Originally called the “Employment Simplification Bill”, but then wisely renamed, the Bill responded to the Gibbons Review of the much maligned dispute resolution provisions implemented in October 2004 by the Employment Act 2002 (Dispute Resolution) Regulations 2004. When enacted (which is likely to be in 2009), the Bill will completely repeal the statutory disciplinary procedures and statutory grievance procedures. It has been well established that these procedures have caused serious problems of complexity for employers, employees and employment tribunals alike. One effect of the repeal of the procedures is likely to be the return to the familiar “Polkey principle”, ie the principle that if an employer in any way fails to follow its own in-house disciplinary procedure when dismissing an employee, the dismissal will – with very few exceptions – be unfair.

As yet, no firm proposals for any replacement measures have been published, except the proposal that the role of ACAS and its Code of Practice on Disciplinary and Grievance Procedures (which will be revised again) is likely to be substantially strengthened. The Bill includes a provision that tribunals would be able to adjust awards by up to 25% where either party had unreasonably failed to follow the Code. The unpopular fixed conciliation periods for ACAS are also to be abolished.

The Employment Bill also includes some other less radical proposals including the introduction of greater powers of enforcement in respect of the National Minimum Wage Act 1998.

The other major long-term development is the ongoing review of the various laws that prohibit discrimination in employment. Having already carried out a preliminary Discrimination Law Review and consulted widely following the publication of the Green Paper titled “A Framework for Fairness: Proposals for a Single Equality Bill for Great Britain”, the Government has decided to carry out further consultation over the summer of 2008 with a view to publishing a final Bill by the end of the year. The overall stated aim is to create “a clearer, more streamlined equality legislation framework” for the future. The eventual Single Equality Act is intended to consolidate existing legislation, simplify the law and reconcile some of the differences between the various existing statutes. There is no proposal at present, however, to introduce radical changes or enhancements to employees’ rights in this area.

More immediate are the intended changes to the Sex Discrimination Act 1975, which were originally expected to take effect before the end of 2007, but are now anticipated in 2008, possibly in April. The intended changes are the result of a successful challenge brought in 2007 against the Government by the Equal Opportunities Commission (EOC v Secretary of State for Trade and Industry [2007] IRLR 327) after which the Government pledged to amend certain aspects of the Act in order to bring it into line with the EC Equal Treatment Amendment Directive. The main changes will relate to the definition of sex-based harassment and pregnancy/maternity discrimination.

The definition of sex-based harassment in the EC Equal Treatment Amendment Directive is “unwanted conduct related to the sex of a person”. The wording in the Sex Discrimination Act (which is supposed to reflect this) is currently “unwanted conduct on the ground of her sex”. The wording of UK legislation is therefore narrower than that of the EC Directive. Once the Act is amended to bring it into line with EU law, any unwanted conduct which is related to sex and which creates an offensive environment for a woman (or a man for that matter) will be capable of amounting to sex-based harassment, whether or not it is targeted at a particular woman (or man).

As regards pregnancy discrimination, the current wording of the Act requires a potential claimant to show that she was less favourably treated than she would have been treated if she had not been pregnant. The ECJ has consistently held, however, that since pregnancy discrimination is “gender specific” (ie it can only happen to women), comparisons are inappropriate. The Government is to amend the relevant wording in the Act to reflect this. This will have the effect that any type of detrimental treatment meted out to a pregnant employee for any reason caused by or related to her pregnancy or a pregnancy-related condition will amount to unlawful discrimination, irrespective of how the employer would treat a non-pregnant employee in similar circumstances. For example, if a pregnant employee is disciplined for lateness in circumstances where the lateness was caused by morning sickness, this will amount to unlawful discrimination even if the employer can show that they would discipline a non-pregnant employee for the same degree of lateness.

The Government announced in November 2007 that it is proposing to extend the right to request flexible working to employees who are the parents of school-age children above six years old. Currently an employee must either have a child under the age of six (18 if the child is disabled) or have caring responsibility for an elderly or dependent adult in order to be eligible to request flexible working. There is to be an independent review of the proposals and the age at which the age limit should be set. It is likely that proposals will be published during 2008.

Meanwhile employers should by now have worked out the new increased holiday entitlements introduced by the Working Time (Amendment) Regulations 2007 on 1 October 2007. From that date, employees are entitled to a minimum of 4.8 weeks annual holiday (increased from four weeks). This is equivalent to 24 days for employees who work a five-day week. Since most employers’ holiday years do not run from October to October, it is important to calculate accurately what employees’ entitlements are during 2008. There will be a further four additional days statutory annual leave as from 1 April 2009, taking the total amount of holiday entitlement to 5.6 weeks. A “ready reckoner” is available on Croner’s website.

All in all, 2008 is likely to be a busier and more important year for legislation than might at first meet the eye.

Croner keeps you right up to date with changes to employment law and helps provide you with a framework for managing staff within the law, reducing the risk of an employee taking you to an employment tribunal and winning. Click here to find out more

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