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Guide to new employment law changes

There is to be an influx of employment law changes coming into effect as of 1 October 2014, tackling many social issues such as fathers’ rights, equal pay, more protection for reservists and an increase in the national minimum wage. By Emily Chalkley, Associate Solicitor, Charles Russell LLP. 

Antenatal rights for fathers and partners

Working fathers will have the choice to take unpaid time off to attend up to two antenatal appointments (lasting no more than six and a half hours each). Antenatal rights for fathers will be available for employees who are in “qualifying relationships”. An employee is in a qualifying relationship if: they are the expected child's father; they are the pregnant woman's husband or civil partner; they live with the woman in an enduring family relationship and are not a relative; they are one of a same-sex couple who is to be treated as the child's parent under the assisted reproduction provisions; and they are the potential applicant for a parental order in relation to a child who is expected to be born to a surrogate mother.

This new legislation has anticipated that the modern day family takes many different forms and there may be situations where the mother’s partner is not the child’s biological father. Meaning from 1 October both employees would be permitted to take time off to attend the same appointment. However, there are a number of aspects of the new legislation that remain unclear. An employer may refuse to grant an employee time off where it is “reasonable” to do so. “Reasonable” is not defined in the legislation and there is no case law as of yet to assist employers to judge when it is reasonable or not to permit employees to take time off for antenatal care. But employers must tread carefully as employees can bring a tribunal claim against them for unreasonably refusing time off.

Employers should therefore consider adopting a clear policy of how such requests will be dealt with and the parameters for refusal. If the employee or agency worker is successful, the compensation payable is twice the hourly rate for the period when the employee would have been entitled to be absent. Furthermore, antenatal care is not defined by legislation and according to government guidance is not restricted to medical examinations. Therefore it is suggested that prenatal classes could fall within the new regulations provided that these are recommended by a registered medical practitioner, although again case law is awaited.

Employment tribunals must order equal pay audits

Greater sanctions are to come into force to ensure that employers are carrying out equal pay audits. As part of a new tougher regime, employers who are found in breach of equal pay legislation can be ordered by the Employment Tribunals to carry out an equal pay audit and make the results of that audit public. The Employment Tribunals will be given wide discretion to determine the remit of these audits because the new regulations contain limited requirements in terms of the detail of the audit. However, it is anticipated that the Employment Tribunals will only order full-scale audits in a small number of cases. If the Tribunal determines that the employer has unreasonably failed to comply with its obligations, it can impose a fine of up to £5,000 at each hearing, in order to address the employer's non-compliance.

For employers, carrying out an equal pay audit is often time-consuming, expensive and complex. One of the most stringent measures contained in the new regulations is the requirement for the employer to publish the results of the completed audit on its website within 28 days. The results must be maintained publicly for at least three years and all employees whose pay data is included will need to be informed of where they can obtain a copy. As a result employers who face a gender pay claim should consider settling in the early stages to avoid the time and cost of an audit. It is also recommended that employers take pre-emptive action such as considering their pay practises and carrying out a pay review to mitigate the risks of successful gender pay claims. An Employer may wish to engage an expert who is external from the business to carry out the audit because if exercised properly and in a non-discriminatory manner, the pay audit can actually provide as a defence to an equal pay claim.

Reservists better protected against unfair dismissal

Attracting new recruits to sign up as a reservist of the armed forces (formerly known as the Territorial Army “TA”) has be somewhat of a struggle. To tackle this the government have attempted to make signing up more attractive to employees who fear enlisting may have a detrimental impact on their job and career. As a result, from 1 October 2014, the statutory qualifying period for unfair dismissal will be removed in the case of a dismissal connected with an employee's membership of the Reserve Forces i.e. the Royal Marines Reserve, Royal Naval Reserve, Territorial Army or Royal Auxiliary Air Force. The changes will apply to employees whose effective date of termination falls after 1 October 2014. Prior to these changes, reservists were at a considerable disadvantage when pursuing a claim for unfair dismissal as a period of call-up could not count towards the two year qualifying period needed to bring a claim.

In practice it is unlikely that the new legislation will result in a greater number of unfair dismissal claims being brought. Under existing legislation an employer is under a duty to re-employ reservists, in the same job and on terms and conditions, no less favourable, than if they were employed in the four week period before being called up. If an employer fails in its duties, a reservist can bring a case before a Reinstatement Committee. This is an independent tribunal similar to an Employment Tribunal with the key difference being that there are no fees associated with bringing a claim. This therefore is likely to be the natural first step for a dismissed reservist as opposed to the pursuit of an unfair dismissal claim, which carries the associated cost. In addition the Secretary of State will be awarded a new power to make payments to small and medium-sized employers if their employees are called up for service. Qualifying employers are entitled to an additional monthly payment of £500 for each full month a reservist on a full-time contract (at least 35 hours a week) is absent. These payments are in addition to the current replacement costs award available, sustained as a result of a reservist's absence.

Increase in national minimum wage

Following the recommendations of the Low Pay Commission the Government has implemented the following increases to the national minimum wage which will take effect from 1 October 2014: the standard rate for those aged 21 and above will increase from £6.31 to £6.50 an hour; the rate for those aged 18-20 will increase from £5.03 to £5.13 an hour; and the rate for those above the compulsory school but aged under 18 will increase from £3.72 to £3.79 an hour.

Due to the relatively small amounts of money involved in practice it is often not financially viable to pursue an individual to pursue a claim for unlawful deduction from wages, unfair dismissal or a detriment claim in relation to the national minimum wage. As a result the biggest concern for employers is enforcement action from HMRC following a complaint from workers, third parties or as a result of the targeted enforcement of a particular low-paying sector. HMRC officers can carry out inspections at any time without providing a reason, and can require employers to produce records and provide other information or access to determine entitlement to the NMW and the level of pay received by workers. If employers are found to be in breach of the national minimum wage HMRC officers can issue a notice of underpayment, which requires the employer to re-pay employees in arrears and pay a financial penalty to the Secretary of State of up to £20,000. The Government has stated its intention to extend the maximum £20,000 penalty to apply to each underpaid worker, but this will require new primary legislation.

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