7 January 2011

Employment Law Changes: Key Dates for January to April 2011

National Minimum Wage: Travel expenses to temporary workplaces
From 1 January 2011, expenses for travel to a temporary workplace can no longer form part of an employee's pay for national minimum wage purposes.

Before 1 January, expenses paid for travel to a temporary workplace could count towards an employer's obligation to pay the national minimum wage. The National Minimum Wage (Amendment) (No. 2) Regulations 2010 amend the National Minimum Wage Regulations 1999 (SI 1999/584) so that expenses for travel to a temporary workplace will no longer form part of employee's pay for national minimum wage purposes.

In addition, from 1 January 2011, the Government is running a scheme to publicise the names of employers that pay their employees below the national minimum wage.

New Tribunal Award Limits
The limit on the amount of the compensatory award for unfair dismissal increases from £65,300 to £68,400 on 1 February 2011.

Other changes coming into force on the same date through the Employment Rights (Increase of Limits) Order 2010 (SI 2010/2926) include: 

• an increase in the maximum amount of a "week's pay" for the purposes of calculating a basic or additional award of compensation for unfair dismissal or redundancy payment from £380 to £400; and
• an increase in the maximum amount of guarantee payment payable to an employee in respect of any day from £21.20 to £22.20

The new limits are applicable where the event that gives rise to the award or payment occurs on or after 1 February 2011.

Right to Request Flexible Working Extended to Parents of Children Under 18
On 6 April 2011, the right to request flexible working will be extended to parents of children under 18 (it currently applies to parents of children under 17, or 18 if the child is disabled).

Under flexible working legislation, an eligible employee who is (or is the spouse, civil partner or live-in partner of) the parent, adoptive parent, guardian, special guardian or foster parent of a child under the age of 17 (or of a disabled child under the age of 18), and who has a need to spend more time with that child, has the legal right to apply to his or her employer for a more flexible pattern of working hours or (where appropriate) the opportunity to work from home.

The move to extend the right to parents of children under 18 is the first stage of changes to the law that will eventually extend the right to request flexible working to all employees.

Maternity, Paternity and Adoption Pay are Increased
The standard rates of statutory maternity, paternity and adoption pay will increase from £124.88 to £128.73 per week from 3 April 2011. Statutory sick pay will also increase from £79.15 to £81.60 per week from 6 April 2011.

Additional Paternity Leave and Pay Available
Additional paternity leave and pay allows fathers to benefit from up to 26 weeks' additional paternity leave if the mother returns to work before using her full entitlement to statutory maternity leave. The new right is available to parents of children with an expected week o childbirth beginning or after 3 April 2011.

Transitional Provisions for Abolition of Default Retirement Age
From 6 April 2011, employers will be prohibited from issuing new notifications of retirement using the statutory retirement procedure and notifications issued before this date must relate only to employees whose retirement dates fall before 1 October 2011.

Employers may continue to prescribe a compulsory retirement age on or after 1 October 2011 only where they can justify it as a proportionate means of achieving a legitimate aim. Employers that do not prescribe a compulsory retirement age must rely on one of the designated fair reasons for dismissal set out in s.98 of the Employment Rights Act 1996, and follow a fair procedure in accordance with ordinary unfair dismissal rules, in order to achieve a fair dismissal. Section 98 cites reasons relating to capability, conduct, redundancy, illegality, and some other substantial reason capable of justifying dismissal, as potentially fair. Retirement will cease to be a potentially fair reason for dismissal.

New Corporate Offence of Failing to Prevent Bribery - Adequate Procedures
A commercial organisation commits a criminal offence under s.7 of the Bribery Act 2010 (which will come into force in April 2011) if it fails to prevent bribery that is intended to obtain or retain business, or an advantage in the conduct of business, for the organisation. An organisation will have a defence to this corporate offence if it can show that it had in place "adequate procedures" designed to prevent bribery by or of persons associated with the organisation.

The Act does not define "adequate procedures", but it require the Government to publish guidance on this. The official guidance has not yet been published, but a letter from the former Parliamentary Under Secretary of State (Ministry of Justice), in relation to the passage of the Act through Parliament, highlighted the key areas that a court is likely to consider when deciding whether or not "adequate procedures" were in place. It suggested that the following factors would be relevant:

• The board of directors should take responsibility for establishing a culture within the company in which corruption is eradicated.
• A senior officer should be directly accountable for oversight of the anti-corruption programme.
• The organisation should have a clear and unambiguous ethical code of conduct that indicates an anti-corruption element.
• Procedures should be established to assess the likely risks of corruption arising.
• The organisation should have employment procedures in place relating to corruption such as: the vetting of employees; contractual obligations and penalties; and suitable disciplinary procedures.
• The organisation should implement a policy on gifts and hospitality.
• Anti-corruption training should be provided to all relevant employees.
• Due diligence should be carried out before entering any business relationship or project.
• The decision making process should require a senior individual to make any decision where there is a risk of corruption.
• Financial controls should be in place to minimise the risk of corruption.
• Procurement and contract management procedures should minimise the opportunity for - corruption.
• Procedures should be in place for the reporting and investigation of potential corruption.