2012 Employment Law Changes – what employers need to know


2012 saw some significant changes to employment law and with more on the horizon employers should review their procedures to ensure they don’t fall foul of the law.

Here is a run-down of the main changes in 2012:

Illness during Annual Leave

In June 2012 the European Courts of Justice ruled that anyone who falls sick while on annual leave is entitled to re-take that leave later in the year.

How this affects you: Employers now fear that anyone taking a holiday and getting a bout of sickness will try to claim back their holiday entitlement. To ensure you are protected holiday procedures should include clear guidelines for reporting sickness while on holiday and reclaiming the leave entitlement.

Qualifying to Bring an Unfair Dismissal Claim

Anyone employed on or after 6 April 2012 will need to have two years’ service before they are able to bring an unfair dismissal claim, (increased from one year). The Government said this was to “provide more time for employers and employees to resolve difficulties, give employers greater confidence in taking on people and ease the burden on the employment tribunal process”.

How this affects youEmployers should remember that anyone employed before 6 April 2012 can bring a claim for unfair dismissal once they have 12 months’ service. Strong and consistence performance management across the business will provide protection to employers from spurious claims.

Pension Auto Enrolment

From 1 October 2012, large employers have to provide a qualifying workplace pension scheme and enrol eligible employees automatically, while making mandatory employer contributions. If a qualifying scheme is not in place employers have to auto-enrol into the National Employment Savings Trust (Nest). The government has staged the implementation over the next five years. Employers are separated into bands depending on the numbers on their payroll.

How this affects you: Review your current pension provision with an independent financial advisor to check it is ‘eligible’, if no scheme is in place acting now will help to avoid future problems.

To check your enrolment dates visit The Pensions Regulator website: http://www.thepensionsregulator.gov.uk

Changes to Employment Tribunal Procedures

The Government announced a “fundamental review” of the Employment Tribunal procedures, with substantial changes introduced on 6 April 2012. The main changes are:

  • Employment judges will hear unfair dismissal cases alone in the tribunal, unless they direct otherwise.
  • The maximum amount of a deposit order, which a tribunal can order a party to pay as a condition to continuing with tribunal proceedings, will increase from £500 to £1,000. The maximum amount of a costs order, which a tribunal may award in favour of a legally represented party, will increase from £10,000 to £20,000.
  • Witness statements are to be taken “as read” unless a tribunal directs otherwise.

How this affects you: The changes are intended to speed up the process and to discourage parties from bringing misconceived proceedings. Changes will continue to be introduced and their effectiveness reviewed.

Maternity, Paternity, Adoption and Sick Pay Increased from 1 April 2012

The Government raised the standard rate of statutory maternity, paternity and adoption pay from £128.73 to £135.45 per week from 1 April 2012.

Statutory sick pay increased from £81.60 to £85.85 per week from 6 April 2012.

National Minimum Wage Increased from 1 October 2012

The main rate of the national minimum wage rose from £6.08 to £6.19 per hour.

The youth rate and the rate for workers aged 16 to 17 stay the same.

The apprentice rate increases from £2.60 to £2.65 per hour, and the accommodation offset increases from £4.73 to £4.82 per day.

New Award Limits Came into Force from 1 February 2012

The maximum amount of a week’s pay used to calculate a statutory redundancy payment and the basic and additional awards for unfair dismissal increased from £400 to £430 on 1 February 2012.

The maximum unfair dismissal compensatory award increased from £68,400 to £72,300.

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