Employment Law UK - April Is A Month Of Change So What Is New?

As usual April is the main month for changes to employment law and despite all the promises, there are still quite a few changes this month.

Default Retirement Age Abolished

The Government has confirmed that the default retirement age will be phased out between 6 April and 1 October 2011 using transitional arrangements. Compulsory retirements during the transition period will be lawful provided that notification of retirement has been issued before 6 April 2011, the date of retirement falls before 1 October 2011. However, employers are required to give at least 6 months' notice of the intended date of retirement. This means that the last day employers will be able to confirm their intention to compulsorily retire an employee is 30 March to ensure their last day is 30 September 2011.

From 1 October 2011, employers will still be able to use a compulsory retirement age to dismiss employees but only where they can demonstrate that it is a proportionate means of achieving a legitimate end (ie they can justify retirement at that age). Where employers do not have this justification for compulsory retirement, the dismissal of an older employee will have to follow a fair dismissal procedure that relies on one of the reasons set out in section 98 of the Employment Rights Act 1996 (i.e. capability, conduct, redundancy or some other substantial reason).

Last week, there was confusion about the transitional provisions to be introduced. It seemed likely, based on changes to the ACAS web site, that these provisions would create a six month window during which employers could retire employees under the old law until 4 April 2012 and not 1 October 2011 as previously understood. This change is not now going to happen according to the draft regulations just published.

Right to Request Time Off for Training

Hopefully you will remember that, from April 6 2010, employees who have been continuously employed for at least 26 weeks, in organisations with 250 or more employees, have the right to request time off to undertake training. Employees will be able to request any training that will help them to be more productive and effective at work, and help their employer to improve productivity and business performance. The application process will be based on that for applying for flexible working. (For details see our Flexible working and Training and Development toolkits).

This right was to have been extended to smaller companies from April this year. However, following consultation the government has decided to delay extending this right because it wants to minimise the burden of regulation for smaller companies and have more time to further scrutinise the potential impact on smaller employers.

Additional Paternity Leave and Pay Comes Into Force

Employees who are fathers, or spouses or partners of mothers are entitled to take additional paternity leave of up to 26 weeks in the first year of their child’s life (20 weeks after the birth of the child) and the employee may be entitled to additional paternity pay. The employee must give the employer at least eight weeks’ notice of his or her start and finish dates for the additional paternity leave. This applies to babies born after 3 April 2011 and also applies to paternity leave in adoption circumstances.

Flexible Working

With effect from 6 April 2011 the right to request flexible working will be extended to employees of children who are under 18 years old. The current limit is under 17.

Positive Action Provisions of The Equality Act

Also with effect from 6 April the provision in the Equality Act on "positive action" in recruitment and promotion come into effect. From 6 April, employers can treat applicants/employees with a protected characteristic more favourably than others in connection with recruitment or promotion. This applies only to candidates of equal merit and the more favourable treatment must enable/encourage an employee to overcome or minimise a disadvantage where he or she is currently under-represented.

Statutory Maternity, Paternity and Adoption Pay Increase

The standard weekly rate of statutory maternity, paternity and adoption pay increases from £124.88 to £128.73. Effective 6 April 2011.

Statutory Sick Pay Increase

The standard rate of statutory sick pay increases from £79.15 to £81.60 per week. Effective 6 April 2011.

Childcare Voucher Schemes

If you operate childcare voucher or similar scheme then, to reduce the cost of the tax relief for higher paid staff, although you can still provide vouchers worth up to £55 per week to employees through the scheme, the limit on the tax free amount will vary for staff joining the scheme from 6 April 2011.

New staff who earn sufficient from that employment to be either higher rate or additional rate taxpayers will see a benefit reported on their P11D form at the end of the year to reflect the reduced tax free allowance.

If you have anyone who qualifies you might wish to speak to them about submitting an application before that date.

Beware sting in the tail; if you are thinking you might close the scheme to new entrants in the interest of simplicity, it is then no longer open to all employees and all current recipients of vouchers or directly contracted childcare will be taxable and NICable in full!

Royal Wedding

The 29 April 2011 is a public holiday in honour of the wedding of Prince William and Kate Middleton. You may be worried about how you will staff your business or whether you must pay staff if you close. Contrary to popular misconception, employees and workers are not necessarily entitled to paid holiday on public holidays. The Working Time Regulations 1998 provide full-time staff with a maximum 28 days' paid holiday entitlement. This may or may not include public holidays and whether it does will depend upon agreements with staff.

Your contract may provide for, say, 20 days' paid holiday plus public holidays. If that is the case, and the contract does not specify which public holidays are included, staff will be entitled to 29 April 2011 as a paid holiday and their overall entitlement for the holiday year in which 29 April 2011 falls will be 20 days plus nine public holidays (there are usually eight). If your contract provides for 28 days (the statutory minimum) inclusive of public holidays, the holiday entitlement will remain 28 days but staff will be entitled to 29 April as holiday and have one less day's holiday to take at another time. If your contract specifically lists the eight usual public holidays as being the public holidays your staff may not be entitled to 29 April as a holiday.

This update was compiled by Elizabeth Arnold, Director, Interregnum Professional Services Limited, Web: www.interregnum.biz