Boyes Turner: April Changes 2012

Here’s what employers have to look forward to in the coming month hopefully along with some much needed sunny spring weather!

Increase in the Unfair Dismissal Qualifying Period

From 6 April 2012 the qualifying period of service to bring an unfair dismissal claim increases from one to two years. The increase will only apply to new employees who start employment on or after 6 April.

Employees will still be able to bring unfair dismissal claims with lesser service for protected reasons such as whistleblowing, reasons related to pregnancy and maternity and dismissal for trade union related reasons. Employees are also able to bring claims for discrimination without any service requirement therefore employers should ensure if they are seeking to dismiss before a two-year period (or at any time), they use consistent procedures and have evidence to demonstrate a dismissal was for a non-discriminatory and fair reason.

Increase in Statutory Payments:

From 6th April, these will increase as follows:

• Standard rates for statutory maternity pay, statutory paternity pay and statutory adoption pay will increase from £128.73 to £135.45.
• The weekly earnings threshold for these payments will rise from £102 to £107.
• Statutory sick pay will increase from £81.60 to £85.85.
• The weekly earnings threshold rises from £102 to £107.
• Maternity allowance will increase from £124.88 to £135.45, with the earnings threshold remaining at £30.

Changes to Tribunal Procedure

As part of the government’s review of Employment Tribunal procedure, the following changes will come into effect for cases which start on or after 6 April this year:

• The limit on the amount of a deposit order a Tribunal can order a party to pay as a condition of continuing proceedings increases from £500 to £1000
• The maximum amount of a costs order, which a Tribunal may award in favour of a legally represented party, increases from £10,000 to £20,000
• Witness statements will no longer be required to be read aloud but will be taken “as read”, unless the Tribunal directs otherwise.
• Tribunals will have the power to direct that the parties to a dispute are responsible for “witness expenses” and that the party who loses the case should reimburse the successful party for any such costs already paid out.

Unless a judge orders a full tribunal to hear the case, unfair dismissal hearings on or after 6 April will be dealt with by a judge alone, without lay members. The government has indicated that progress on this change will be reviewed after a year.

Default Retirement Age Procedures (DRA)

As set out in our previous updates, although the DRA has now been abolished, employers will still need to be aware of some residual dates this year.

Under the DRA’s transitional provisions, the last day when an employer was able to notify a qualifying employee of their intended date of retirement was 5 April 2011. As the maximum notice of intended retirement under the DRA is 12 months, key retirement dates to note for this year are:

• For those employees given notice on 5 April 2011, the last date on which they can be retired under the DRA is likely to be 5 April 2012. This is subject to any agreed extension - see point 3 below.
• The last day on which an employee could have requested to work beyond their intended date of retirement was 4 January 2012.
• If an employer agrees to allow an employee to work beyond their intended date of retirement, the maximum extension possible is 6 months; therefore, the last possible date on which an employee can be retired under the DRA procedure is likely to be 5 October 2012.

Income Tax and National Insurance

From 6 April:

• The income tax personal threshold increases by £630, bringing it to £8,105. The threshold for higher rate income tax of £40% is reduced to £34,371 (from £35,001).
• The lower earnings limit for primary class 1 National Insurance contributions increases from £102 to £107

Pensions

• The basic state pension increases from £102.15 to £107.45 per week.