What’s New in Employment Law for 2012

Posted 21/02/2012

It’s all change for Pensions

The Pension Act has now become law. The pension age for all women will rise to 65 in 2018 and to 66 for both men and women by October 2020. The further rise in the pension age to 67 is likely to occur some time between 2026 and 2028. This follows the abolition of the default retirement age (DRA) last April which meant that employers were no longer able to retire employees at 65 unless they can justify doing so on objective grounds.

The abolition of the DRA coincides with a huge 32% increase in the number of age discrimination claims. For employers, emphasis now needs to be on ensuring that age-friendly policies and practices are in place and that all staff are performance managed. An important Supreme Court decision on retirement is expected imminently so watch this space!

In a further attempt to deal with an ageing population, employers will be required to register with the Pensions Regulator, provide information to employees, automatically enrol employees in a pension scheme and make contributions on their behalf. This is known as auto-enrolment and, for larger employers, will begin in October this year. Further information is available at http://www.thepensionsregulator.gov.uk/employers.

Longer service required to bring unfair dismissal claims

From April 2012, employees starting work on or after 6th April 2012 will need to be employed for two years to bring an unfair dismissal claim. The Government hopes this will reduce the number of claims by up to 2100 a year. Last time the Government changed the qualifying service period to two years, this was unsuccessfully challenged in the courts as being discriminatory on grounds of sex, nevertheless the service requirement was subsequently reduced to the current one year level. Whilst the rate of unfair dismissal claims may fall, this change is likely to encourage spurious discrimination-based claims by those with less than two years’ service. Critics have also said that young people would be hardest hit by this proposal, being most likely to be last in and first out, while more experienced workers are retained.

Other Changes

– Compromise agreements, commonly used to settle claims on termination of employment , will now be referred to as ‘settlement agreements’ with standardised wording.

– ‘Protected conversations’ are to be introduced with the aim of encouraging open discussion between employee and employer without fear of retribution on either side. However, employers won’t be protected against claims of discrimination or harassment arising out of protected conversations.

– Mediation and early conciliation are also to be promoted with greater involvement by ACAS in the early stages of a claim. Whilst employers may benefit from increases in the amount an employee will have to pay to continue with a poor claim and the amount of costs which can an employee can be ordered to pay, the Government also intends to introduce fines on employers for breaches of employment rights. How to prepare for the changes

– Visit http://www.thepensionsregulator.gov.uk/employers and prepare for auto-enrolment.
– Tighten up on performance management procedures for all staff.
– Ensure your equal opportunities policy is up to date and that staff have received adequate training to avoid the possibility of discrimination claims.
– Understand the rights of your employees so that breaches and therefore fines can be avoided.