On 24 April 2013, the House of Lords finally approved the legislative provisions introducing employee shareholder status into UK law, having rejected them twice previously. As a result, the controversial ‘employee shareholder’ status will now become law and is likely to be implemented later this year.
House of Lords approval comes after the government made a number of concessions to the original employee shareholder provisions, which can be found here:
However, the latest concession is that, in order for an individual’s agreement to become an employee shareholder to be valid, the individual must have taken advice from a relevant independent advisor on its effects prior to entering into the relevant contract. In addition, the employer will have to pay reasonable costs for the individual taking that advice, regardless of whether that individual actually then accepts the role.
It was announced earlier this week that the government has accepted the recommendations of the Low Pay Commission to increase the national minimum wage by 12p for adults, lifting it from £6.19 per hour to £6.31 per hour. It will also increase by 5p to £5.03 per hour for 18-to-20-year-olds and by 3p to £2.68 per hour for apprentices.
The Department for Business Innovation and Skills (BIS) has just published a ‘Progress on Reform’ report which sets out a new implementation timetable in respect of some of the more major employment law reforms due to come into force later this year. Many of these reforms were originally scheduled to come into force as early as April 2013 but have now been delayed.
In its report, BIS reiterates that the government’s overall intention behind the reforms is to create greater flexibility in the labour market through the use of ‘light touch’ regulation. This is on the premise that such flexibility will give employers the confidence to hire people whilst knowing they can reduce the size of their workforce at any time when economic circumstances dictate.
The new timetable that has been unveiled for the employment law reforms is as follows:
In the summer of 2013 the following reforms are intended to come into force:
•protected settlement conversations;
•revised rules on employment tribunal procedures;
•the 12 month earnings cap on compensatory awards for unfair dismissal claims;
•new tribunal fees; and
•a stricter regime for whistleblowing laws.
In the autumn of 2013 the following reforms are intended to come into force:
•the introduction of employee shareholder status; and
•reforms to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
It is also understood that 2014 will see the implementation of:
•ACAS Early Conciliation; and
•the introduction of tribunal penalties for employers where there have been aggravating features to a tribunal case.
For more information on the new timetable and the government’s recent comments on the reforms in general, please go to:
ACAS has now launched a consultation on a new ‘Code of Practice on Settlement Agreements’. The Code, which aims to help everyone in the workplace understand how settlement agreements will work in practice, is due to come into effect alongside new legislation governing the use of settlement agreements by employers and employees.
Under the new legislation, any offers or discussions regarding settlement agreements will not be able to be used in evidence in unfair dismissal claims unless either of the parties has engaged in ‘improper behaviour.’ The definition of ‘improper behaviour’ is one of the issues that will be dealt with in the accompanying ACAS Code.
On Monday 11 February 2013 the government confirmed it plans to open a consultation next month on the proposed technical changes to auto-enrolment into a qualifying pension scheme. The objective is to provide employers and the pensions industry with an opportunity to comment on the proposed changes, with a view to simplifying the process thereafter.
Since October 2012 employers with over 120,000 employees have been obliged to provide their employees with access to a qualifying workplace pension scheme. This obligation is to be rolled out gradually over the next five years and will eventually apply to every employer in the UK, regardless of size.
Feedback on auto-enrolment since October has identified a number of ways in which the system could be improved, including:
Making assessment of the workforce easier.
• Making it easier to demonstrate that money purchase schemes meet the requirements to be ‘qualifying schemes’ for auto-enrolment purposes.
• Removing the duty to enrol particular groups of employees, such as those who benefit from protection because they have already exceeded the lifetime allowance for tax purposes.
• Recognition of the need to give enough notice to allow employers and providers to update their systems in time.