What lies ahead for employers in 2013 ? 7 March 2013

1. What lies ahead for employers in 2013?7 March 2013

2. Speaker Paul Ball Head of Employment Tel: 0113 246 2312 Mob: 07753 323772 Email: paulball@3volutionllp.com

3. Programme • Settlement discussions and agreements • Early conciliation • Employment Tribunal fees and limit on compensation in unfair dismissal cases • Reform of ET rules • TUPE reform • Collective consultation changes • Management of long-term sickness • Questions

4. Context • Enterprise and Regulatory Reform Bill currently going through Parliament • Government desire to cut red tape on businesses and aim to increase efficiency and competitiveness • Aim to reduce burden on ETs • Various recent consultation papers/responses to consultations issued

5. Settlement Agreements • BIS Consultation: “Ending the employment relationship” (September 2012) • “Protected discussions” • Limit on unfair dismissal awards • Government response published January 2013 • Likely implementation date, Summer 2013

6. Settlement Agreements (continued) • Currently: • Risks associated with having “off the record” chats with employees • If the discussion is unsuccessful, will be admissible in subsequent ET claims • Any deal reached needs to be confirmed in a “compromise agreement” • Proposal: • Some protection given to parties who instigate settlement discussions. • Won’t be admissible in unfair dismissal claims • NB: “Improper behaviour” caveat • “Compromise agreements” to become “Settlement agreements”

7. Settlement Agreements (continued) • Draft ACAS Code of Practice and Guidance issued • Template letter to instigate settlement discussions • Can be instigated by an employer or employee • Not compulsory, i.e. a party can decline to enter settlement discussions • Model settlement agreement

8. Settlement Agreements (continued) • Risks • “Improper behaviour” caveat • Conduct during settlement discussions and possible breach of trust and confidence • If discussions fail, employer must then follow a fair process in taking action • Will only be ‘protected’ in relation to future unfair dismissal claims • Effect on other ET claims, e.g. discrimination or whistleblowing?

9. Early conciliation • BIS consultation, January 2013 • Consultation closed 15 February 2013 • New role for ACAS • Aim is to try and reduce number of disputes going to ET claims

10. Early conciliation - how will it work? • All prospective claimants must submit an “EC form” to ACAS before can issue the ET claim • Limited exceptions, e.g. multiple claimants, claims with a short time limit, claims where prospective respondent has already asked ACAS to conciliate • Limited information to be supplied to ACAS on the EC form • ET time limits will stop for 4 – 6 weeks

11. Early conciliation (continued) • Two stage ACAS contact with claimant: • First stage – telephone contact by an ECSO by close of business day after receipt of EC form • Second stage – contact by ACAS conciliator within 2 working days of receipt of the EC form • ACAS contact with the respondent • No obligation to conciliate • Where parties agree to conciliation, ACAS has one calendar month to try and reach settlement • Possible extension of up to 2 weeks, where is a reasonable prospect of settlement being achieved

12. Early conciliation (continued) • At end of conciliation period, ACAS will issue an “EC Certificate” • ET time limit will recommence from this point • An EC Certificate number will be required before the ET will accept any subsequent claim • Possible time limit issues if EC Certificate issued early?

13. Cap on Unfair Dismissal Compensation • Proposal: • Subject to the maximum limit, a cap of 12 months’ pay on compensatory award on unfair dismissal cases • Currently: • Maximum compensation award £74,200 • Median award significantly less than this* • Most awards/settlements are lower than claimant’s initial expectations * * The SETA 2008 Survey

14. Cap on Unfair Dismissal Compensation (continued) • Government believes this will lead to: • earlier resolution of disputes • more certainty about likely costs of unfair dismissal claims • But: • risk of greater number of uncapped claims, e.g. discrimination? • risks of possible injunction action to prevent dismissal where a claim is likely to be worth more than/close to the maximum award?

15. Fees in Employment Tribunal Claims • Summer 2013 • Aim is to encourage settlement, mediation and arbitration • Two stage fee charging structure

16. Fees in Employment Tribunal Claims (continued) • Remissions available for those unable to pay • Refunds available in limited circumstances only

17. Fees in Employment Tribunal Claims (continued) • Multiple claims – the highest level fee is to be paid, once only • Multiple claimants – Depending on the number of claimants a multiplier of 2, 4 or 6 will apply to all fees

18. Fees in Employment Tribunal Claims (continued) Various application specific fees * Payable by the employer

19. Fees in Employment Tribunal Claims (continued) Employment Appeal Tribunal fees

20. New Employment Tribunal Rules of Procedure • Government intention to bring new ET rules in force, April 2013 • Objective is to simplify the existing ET rules

21. New Employment Tribunal Rules of Procedure

22. New Employment Tribunal Rules of Procedure (continued) • New ET1 and ET3 forms – NB. Minor changes only • Prescribed information must be supplied on the ET1 otherwise claim will be rejected • ET3 must be filed by 5pm on the relevant deadline • New procedure for seeking extension of time to file ET3 • Sift stage to identify weak claims/responses: • Reasonable prospects of success • Any jurisdictional issues to be determined • Case management directions • Could lead to automatic strike-out of a claim/response

23. New Employment Tribunal Rules of Procedure (continued) • CMDs and PHRs to be replaced with “preliminary hearings” • Wide ranging issues can be determined at a preliminary hearing

24. New Employment Tribunal Rules of Procedure (continued) • Full hearings – ET judges to have wider discretion on conduct of these, e.g.: • Limiting duration of witness evidence or making submissions • May exclude witnesses from the hearing until they give evidence • Costs awards - £20,000 limit removed • Written reasons for decisions on any disputed issue to be given as standard (can be brief)

25. TUPE Reform • TUPE 2006 introduced “service provision changes” as a relevant transfer • First generation outsourcing, re-tendering or outsourced services reverting in-house

26. TUPE Reform • Organised grouping of employees/resources carrying out an activity for a client • Whose principal purpose is the carrying out of that activity • Who are assigned to the grouping of resources or employees that is to transfer • Other than one-off/short-term duration or provision of goods only

27. TUPE Reform (continued) • BIS consultation, January 2013. Closes 11 April 2013 • Government proposes to repeal service provision changes as a relevant transfer • Repeal of “Employee Liability Information” provisions – to be replaced with guidelines and model terms for contracts • Proposed change to existing provision which restricts changes to terms and conditions of employment by a transferee (NB. Won’t extend to harmonisation of terms and conditions)

28. TUPE Reform (continued) • Proposal to limit duration of transferred collectively-agreed terms to 12 months post-transfer • Limitation on an employee’s ability to resign because of changes to working conditions – must be in breach of contract • Post-transfer change of workplace redundancy will be an ETO reason • Transferor to be able to rely on transferee’s reasons for dismissal

29. TUPE Reform (continued) • Transferee to be able to consult with representatives of employees pre-transfer about post-transfer measures • Micro-businesses will be able to consult directly with employees rather than representatives

30. Collective Redundancy Consultation • BIS Consultation, June 2012 • Government response, December 2012 • Currently:

31. Collective Redundancy Consultation (continued) • From 6 April 2013 • Non-statutory guidance on definition of “establishment” • Employees on fixed-term contracts close to expiry date to be excluded from the numbers • Protected award will remain up to 90 days pay per employee

32. Management of long-term sick employees • 300,000 people fall out of employment into the welfare system because of health issues each year • £13 billion State costs on health related benefits • £9 billion employer costs on sick pay and associated costs • 2011 review led by Dame Carol Black “Health at Work – Independent Review of Sickness Absence” • January 2013 – Government response

33. Review of long-term sickness absence • Government accepts most recommendations made in the Health at Work report • Health and work assessment and advisory service to be set up • Revised fit note guidance for GPs • Reforms to the benefit system (not covered today)

34. Review of long-term sickness absence (continued) Health & Work Assessment and Advisory Service (HWAAS) • State-funded • GP referral to HWAAS after 4 weeks’ sickness absence unless clear reasons for not doing so (e.g. employee is about to return to work) • Employer can refer employee to HWAAS directly • Information and advice from HWAAS to be shared with employers

35. Review of long-term sickness absence (continued) HWAAS • Initial telephone assessment by OH professional • Face-to-face assessment if needed • Report prepared and shared with the employee, employer and GP, outlining how best to secure a return to work • Continuing support where needed • Further action/remedial steps to be arranged where relevant

36. Review of long-term sickness absence (continued) • Joint responsibility of employer, employee and GP to take forward recommendations • On-going provision of telephone and on-line advice for employees and employers at any time • Will link in with “Universal Jobmatch” service (hosted by Monster Worldwide) where employee would benefit from finding alternative employment • Employers will be encouraged to implement HWAAS recommendations via Access to Work scheme

37. Review of long-term sickness absence (continued) • Government will review whether to provide tax relief on cost to employers of treatment/rehabilitation in due course • Existing tax relief on Employee Assistance Programmes retained (for now at least) • SSP record-keeping requirements to be relaxed • GPs and health care professionals to be supported to develop knowledge to help them provide useful advice for employers and employees • Revised fit note guidance to be issued

38. Closing comments • Only a proportion of the employment law changes we are likely to have to deal with in the coming months • What do you think the likely impact these will have on how you manage people/people issues?

39. Any Questions?

40. Useful links • www.gov.uk/government/consultations/ending-the-employment-relationship • www.acas.org.uk/media/pdf/2/r/Consultation_draft_COP_FW.pdf • www.gov.uk/government/consultations/early-conciliation-consultation-on-proposals-for-implementation • www.gov.uk/government/consultations/transfer-of-undertakings-protection-of-employment-regulations-tupe-2006-consultation-on-proposed-changes • www.gov.uk/government/consultations/collective-redundancies-consultation-on-changes-to-the-rules • www.dwp.gov.uk/policy/welfare-reform/sickness-absence-review/