Food and Drink Seminar

Employment Law Update

Wie-Men Ho

Partner

Eversheds LLP

3rd October2013

#thinkfoodlaw

Agenda

• Will cover some key changes in employment law, including:

– Introduction of Employment Tribunal Fees

– New cap on unfair dismissal compensation

– “Protected Conversations”

– Early conciliation

– Changes to the rules around collective consultation

Food and Drink Seminar

Employment Tribunal Fees

Question 1

• Someone pursuing a discrimination claim to full hearing will now have to pay tribunal fees of:

a. £390

b. Varies depending on the likely value of their claim

c. £750

d. £1200

Answer: D - £1,200

• Employment tribunal fees

– Two-stage fee structure

– Fee remission system will operate

– Power to order losing party to reimburse winner

• In practice: some fees will be payable by the Respondent e.g. £100 to set aside default judgment; £600 for judicial mediation

Type of fee Type A e.g. unpaid wages

Type B e.g. UD, discrim.

Issue £160 £250

Hearing £230 £950

Food and Drink Seminar

Unfair Dismissal Compensation Cap

Question 2

• The compensation cap for unfair dismissal claims has been changed to:

a. £72,300

b. lower of 12 months’ pay and £72,300

c. lower of 12 months’ pay and £74,200

d. 12 months’ pay

Answer: C - lower of 12 months’ pay and £74,200

• Unfair dismissal compensation:

– will apply to “ordinary” UD claims only

– Govt’s view is that salary-based cap will help:

• manage compensation expectations;

• encourage early resolution of disputes; and

• create greater certainty for employers

– standard “pay” as defined in ERA, so excludes pension, benefits in kind and discretionary bonuses

– based on gross, rather than net, pay

• In practice: despite the controversy this has attracted, few individuals will be disadvantaged given that current median unfair dismissal award (basic and compensatory) is less than £5,000

Food and Drink Seminar

Early Conciliation

Question 3

• From 1 April 2014, anyone thinking about making an employment tribunal claim will need to contact Acas first, which will offer Early Conciliation (“EC”)

• The prospective claimant is required to participate in EC before they are permitted to present an ET1 form

–True or false?

Answer: False

• Prospective claimant must send EC form to Acas before making claim, BUT either party free to decline EC

• 2 stage process once EC form received:

1. EC support officer will make “reasonable attempts” to contact claimant to outline process

2. If claimant wishes to attempt EC, conciliation officer will contact respondent

• EC duration = 1 month (extendable by 2 weeks)

• Limitation periods suspended to allow for EC

• Acas then issue EC certificate – needed if claim does proceed to ET

• In practice: appears relatively easy for claimants to avoid EC; will Acas be properly resourced?

Food and Drink Seminar

“Protected Conversations”

Question 4

• Evidence of “pre-termination negotiations” or “protected conversations” are inadmissible as evidence in support of which of the following types of employment claim?

a. discrimination

b. unfair dismissal

c. automatically unfair dismissal

d. wrongful dismissal

Answer: B - unfair dismissal

• With effect from 29 July 2013, evidence of “pre-termination negotiations” are inadmissible as evidence in support of unfair dismissal claims

• Pre-termination negotiations (s111A ERA):

– what is stated in a settlement offer, or during discussions about it, cannot be referred to in the course of “ordinary” unfair dismissal cases, unless there has been “improper behaviour”

– unlike “without prejudice” rule, no pre-existing dispute between parties required

– a new Acas Code on settlement agreements, including examples of improper behaviour has been published (but courts will have final say)

• In practice: Code suggests “process” to be followed when making offers, to reduce risk of misunderstandings; non-statutory Acas guidance will also be available

Food and Drink Seminar

Changes to Collective Consultation

Question

• An employer commencing a collective consultation where it is proposing to dismiss 100 or more employees “at one establishment” must give how many days notice before the first redundancy can take effect?

a. 70 days

b. 90 days

c. 30 days

d. 45 days

Answer: D – 45 days

• Redundancies of 100 or more employees - timing reduced from 90 to 45 days.

• Redundancies of between 20 and 99 employees, period remains unchanged at 30 days.

• In June 2013, the EAT held that the term “at one establishment” must be disregarded:

– Previously only applied to redundancies of 20 or more employees “at one establishment” - meant that if the 20 or more employees were spread around different “establishments” within the business then the collective consultation obligation did not arise.

– Now, collective consultation obligations are triggered for redundancies of 20 or more people across the business, regardless of where they are based.

• In practice: Employers need to carefully monitor multi site redundancies to avoid missing collective consultation trigger.

Food and Drink Seminar

How these changes affect your business

How these changes affect your business

Collective Consultations

• As many food & drink employers have multiple sites – need to closely manage the numbers of potential redundancies across all sites so as to ensure the collective consultation trigger is not missed.

• For regular, small redundancies at different sites, it may be sensible to have a standing body of elected representatives for the affected employees to avoid repeated elections.

• The content of consultations may reflect different, more local issues and care is needed to ensure the information and consultation duties are met in each circumstance.

How these changes affect your business

Fees, Early Conciliation, Protected Conversations, Compensation Cap

• Fees – “pay for what you use” principle, promotes early settlement.

• The recent and proposed changes highlighted indicate a broad effort to incentivise early settlement and reduce costs for both employers and the Tribunal system.

• F&D industry employs 15% of UK manufacturing workforce, so should benefit from these reduced costs, provided that employers effectively take advantage of the opportunities for early settlement.

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