Costing the job

Last year saw some major changes in employment law. Flexible working. Enhanced maternity rights. Paid paternity leave. Equal pay questionnaires. Changes to the rules on working time. In December, we also saw the new rules prohibiting discrimination on the grounds of sexual orientation, religion and belief.

In 2004, the pace shows no sign of slacking. This article provides a quick rundown of what we can expect on the legislative front over the next 12 months.

Another increase in the maximum compensatory award in unfair dismissal cases took effect on 1 February 2004. This has now gone up to £55,000. At the same time, there was an increase in the statutory cap on a week’s pay for the calculation of statutory redundancy payments and the basic award in unfair dismissal cases. This went up to £270 per week.

Agency workers

In April 2004, we should see the introduction of new regulations governing the conduct of employment agencies. The new legislation is intended to update, streamline and simplify the existing rules regulating the private recruitment industry. What the new regulations will not do is to resolve the fundamental question of who – if anyone – employs the agency worker (a question which was the subject of some interesting case law last year). At a European level, there may also be movement this year to revive the proposals for an Agency Workers’ Directive. Negotiations on the text of such a directive collapsed last year, but the proposal may well reappear this year, albeit in slightly different form.

Another review, another Bill

By the middle of 2004, the new Employment Relations Bill – published late last year – should have become law. The Bill represents the culmination of the Government’s review of the Employment Relations Act 1999. Less wide-ranging than the unions wanted, the Bill amends the rules on statutory union recognition, industrial ballots and the legal protection of striking workers. In addition to these measures on collective rights, the Bill also attempts to improve the operation of certain individual employment rights. For example, it will attempt to clarify the role of the companion at disciplinary and grievance hearings. There is also provision to protect employees who have requested a flexible working arrangement from unfair dismissal, even if they have less than one year’s service.

Dispute resolution resolved?

The introduction of statutory dispute resolution measures is being targeted for October 2004. This reform was the centrepiece of the Employment Act 2002 and represents the Government’s big push to drive employment disputes away from the employment tribunals and back to the workplace. It is arguably the biggest event on employment lawyers’ calendars for this year. The dispute resolution measures will have a major impact on the way in which employers discipline and dismiss their staff and will also affect how they deal with employees’ grievances. Employers’ existing procedures will need to be reviewed prior to this date; and managers will need to be trained on how to implement the new procedures.

Failure to follow the Government’s new disciplinary and dismissal procedures will render dismissals automatically unfair, and there will be new powers for tribunals to award enhanced levels of compensation in such cases. In some circumstances, employment tribunals may adjust the size of the compensatory award by up to 50%: effectively adding a new punitive element to the calculation of unfair dismissal awards. The Government had previously intended to make the new statutory procedures contractually binding. Sensibly, it has now shied away from this idea and will not be bringing this part of the Employment Act 2002 into force. A new code of practice from ACAS is expected to coincide with the introduction of the new measures.

DDA extended again

Another major change expected for October 2004 is the coming into force of new regulations amending the Disability Discrimination Act 1995 (DDA). Practitioners will be well aware of the huge impact which the employment provisions of the DDA have had over the last few years, particularly in the context of the management of long-term absences. The Disability Discrimination (Amendment) Regulations 2003 will widen the scope of the DDA further through the introduction of the following measures:

1. The employer’s existing duty to make “reasonable adjustments” will be widened to cover “any provision, criterion or practice applied by or on behalf of an employer” which places a disabled person at a “substantial disadvantage” in comparison with a non-disabled person.
2. Employers will no longer be able to justify a failure to make adjustments, if it is established that the adjustment was a reasonable one to make.
3. There will be an explicit prohibition of harassment for a reason relating to a person’s disability.
4. The small employer exemption will be removed. (Currently, the DDA applies only to those employers with 15 or more employees.)
5. Some currently excluded occupations – e.g. firefighters and prison officers – will be brought within the scope of the DDA.

Reform of the TUPE Regulations is also expected some time this year, but we are not yet clear when they will be introduced or the precise form which they will take. The Government’s intention is to clarify the scope of the TUPE Regulations, which have been a constant source of controversy and litigation since their introduction over 20 years ago. Employment lawyers have been waiting for several years for this legislation, so assurances from the DTI that the proposals will be published “soon” tend to be taken with a pinch of salt.

A case of overload?

Although the much-anticipated age discrimination legislation is not due to come into force until October 2006, we can expect a fairly detailed indication of the shape of things to come during the course of this year. Draft regulations are expected during the first half of 2004 and the Government intends to lay legislation before Parliament by the end of the year. This is with a view to allowing everyone to become familiar with the new law and employers time to prepare for the changes that will be required.

With so many employment measures coming into force, it is difficult to identify a single, unifying theme. However, what does seem to be emerging is a tension between the increase in substantive employment rights on one hand and the Government’s desire to reduce the caseload of the tribunals on the other.

What is also clear is that there is going to be absolutely no let-up in the volume of legislation being introduced. The employment relationship is becoming increasingly regulated and, for employers, the cost of non-compliance is higher than ever before. Against this background, it is perhaps not surprising that so many employers are insuring themselves against employment tribunal claims, outsourcing work to independent contractors and even engaging workers outside the EU with a view to minimising the legal risk. It does seem to be an ironic aspect of employment law that often it has an effect which is very far removed from what its drafters originally intended.

Hayley Bloodworth, Proactive Employment Lawyers, Aberdeen