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The 2013 and 2014 employment law developments you need to know

December 2013

What were the 6 significant developments in employment law in 2013 and what are the 6 key areas to watch out for in 2014, and beyond?

What happened in 2013?

1. Negotiating an employee's exit

Compromise agreements were renamed ‘settlement agreements’ and employers and employees can now have a discussion about parting company without those discussions being referred to in a future unfair dismissal claim.  The discussions can however still be referred to in discrimination and whistleblowing claims and employees still need to seek independent advice to implement the settlement agreement. 

Time to have “off the record” discussions with your employees

2. Unfair dismissal compensation

Unfair dismissal compensation is now capped at the lower of £74,200 or an individual’s gross annual salary.  The courts currently face a claim that the annual salary cap is discriminatory against older employees.   This is because it can take them longer to obtain re-employment after dismissal and should their unfair dismissal claim be successful (and they earn less than £74,200) they may not be adequately compensated for such unfair dismissal.

3. Tribunal fees

Fees were introduced for the first time in the Employment Tribunal to discourage employees from bringing spurious claims (see our earlier article).  Challenges brought by Unison and the Human Rights Commission against the imposition of these fees were unsuccessful.

For unfair dismissal and discrimination claims the issue fee is £250 and the hearing fee is £950. There is a lower tariff of £160 (and a hearing fee of £230) for more straightforward claims such as unpaid wages. 

4. Whistleblowers

Whistleblowers no longer need to make their “disclosures” in “good faith” – for example they can still bring a claim for detriment or dismissal even if their disclosure was made for personal gain (however their compensatory award from the Employment Tribunal could be reduced by up to 25%). 

New laws now require the disclosure of information to be in the “public interest”.  Public interest is not defined but it must be “in the worker’s reasonable belief” or the reason for making the disclosure.  It is possible that an employee who complains about a breach of her own contract may be able to argue that her complaint has wider “public interest” consequences.

5. Collective consultation

If over 20 employees are at risk of redundancy in any one ‘establishment’ then the employer must collectively consult with those employees.

In the “Woolworths” case, the EAT decided that each Woolworths shop was not a separate establishment for the purposes of collective consultation.  The employer (or the administrative receiver in this situation) must look at the business as a whole to determine if the threshold exceeds 20 employees.  The receiver did not do this and was therefore in breach of the relevant redundancy laws and each affected employee was entitled to up to 90 days’ salary. The Court of Appeal will hear this case in January 2014.  A separate Northern Irish case for the retail chain Bonmarche has been referred (on similar facts) to the European Court of Justice.

On 6 April 2013, the time period for collective consultation was reduced.  Where an employer proposes to dismiss 100 or more employees at one establishment within a 90 day period, the consultation must begin at least 45 (it was previously 90) days before the first dismissal.  The consultation time period of 30 days for redundancy dismissals for 20 -99 employees remains unchanged.

Important change to collective consultation required on redundancy

6. Employee ownership

On 1 September 2013, a new category of employee (the ‘employee owner’) was born.  In return for giving up their rights to claim unfair dismissal and redundancy pay, employee owners can be allocated shares to the value of between £2,000 and £50,000 which are free of Capital Gains Tax. There has been very limited take-up to date.

Employee shareholder status implemented 1 September 2013

What should you look out for in 2014, and beyond?


The long anticipated changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") have been announced and will come into force on 31 January 2014. 

A genuine place of work redundancy after a TUPE transfer will no longer be “automatic” unfair dismissal.  However it could still be considered “ordinary“ unfair dismissal depending on the circumstances.

Two other sensible amendments reflect the commercial situation that has long been followed by many employers:

  • Prior to the TUPE transfer both parties may now agree to start joint collective redundancy consultation and such consultation will be included in the requisite legal time frame; and
  • From June 2014, micro firms (i.e. less than 10 employees) need not elect employee representatives and collectively consult on a TUPE transfer (if there are no other representatives or unions) and instead may consult directly with the employees.

2. ACAS early conciliation

From 6 April 2014, Employment Tribunal claims will first be sent to the government body ACAS so that the possibility of conciliation can be explored.  Parties will not be compelled to conciliate but a claim will not be able to be lodged with the Employment Tribunal without a certificate from an ACAS Conciliation Officer that a settlement is not possible or a settlement has not been reached within the prescribed period.   

3. Penalties for employers who lose cases

This change was due to come into force on 25 October 2013 but has been delayed until 6 April 2014.  If the Employment Tribunal decides that the employer has breached a worker’s rights and there has been an “aggravating factor”, then it may impose a penalty (payable to the government, not the worker) of between £100 and £5,000.  Similar to a parking fine, the penalty is reduced by 50% if paid within 21 days.

4. Preparing for 2014 flexible working for everyone

The right to request flexible working will extend to all employees from 6 April 2014. This brings new challenges and new opportunities to the workforce.  

Flexible working extended to all employees

5. Abolishing the discrimination questionnaire

The removal of this formal procedure was meant to take place in March 2013 but has been delayed until 6 April 2014.  Its removal is likely to create further uncertainty for both parties as to how best to request and respond to questions about discrimination.

6. Shared parental leave – due to come into force in 2015

The Government recently published its response to the consultation on shared parental leave

The response detailed the logistics of the employee requesting or changing their leave dates and introduced 20 new “Keep in Touch” days for each employee.


For further information or to discuss the issues raised, please contact Emma Clark or David Widdowson on +44 20 3051 5711.


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