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New employment law affecting businesses in the channel

Microscope contributor

In recent years, the government has tried to make it easier for everyone to see the legislative changes that are coming by using a common commencement date system, writes Adam Bernstein. Under this, legislation and regulations are brought in on given dates in April and October.

The system is not foolproof because a number of changes do come in at other times of the year. Since April 2009, to take account of this, the government has been publishing a forward programme of changes. Here is a guide to the most important of the new rules.

Of course, after the general election, anything that had been due to come into force beyond June might change or even not happen, depending on the make-up of the new government. However, the pre-election advice from government departments was that little was contentious and likely to be stopped.

Employment: new compensation limits

In an unprecedented move, compensation limits for unfair dismissal went down, for the first time ever, from £66,200 to £65,300 - from 1 February 2010. This is because of a reported fall in the RPI index.

Right to request time to train

Parliament wants to create a culture in which all employers see investing in the skills of their workforce as one of the most powerful things they can do to drive their businesses forward.

Under the Employee Study and Training (Eligibility, Complaints and Remedies) Regulations 2010 and the Employee Study and Training (Procedural Requirements) Regulations 2010, eligible employees would have a right to ask their employer to give them time to undertake training. Employers with more than 250 employees would have to consider requests fairly and seriously and respond within a set timeframe.

To make a request for time to train, an individual must be an employee and have worked for the business continuously for at least 26 weeks on the date they make their request. There are exceptions to this right, including agency workers, those in the armed forces, and those of school age. This change came into force on 6 April 2010.

Blacklisting of trade unionists

To prevent employers from blacklisting workers because of their trade union membership or activities, the government has implemented regulations outlawing the compilation, dissemination and use of trade union blacklists. The issue was consulted upon during the summer of 2009 and the regulations were introduced on 2 March 2010.

The Equality Act

This Act has as its core aim the harmonisation and, in some cases, extension of existing discrimination law covering the "protected characteristics" of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.

It will address the impact of recent case law, which is generally seen as having weakened discrimination protection, and harmonise provisions defining indirect discrimination.

Among the changes, it places a new duty on public bodies to ensure that suppliers follow the equal opportunities law and provides for employers to review gender pay differences and to publish those results. It should be in force by October 2010.

The national minimum wage

No year can now pass without the national minimum wage for the country's lowest-paid workers being up-rated. The new rates are not yet known, but they will change in October 2010. Best to diarise this now.

Amendments to the Conduct of Employment Agencies and Employment Business Regulations

After consultations in 2009, amendments to the Conduct of Employment Agencies Regulations are expected to come into force in October 2010. Overall, the Regulations introduce measures designed to clarify lines of responsibility between agencies and hirers, and ensure that essential protections remain in place for the most vulnerable agency workers.
 
The main changes include a retention of the opt-out from the protections for company contractors (those selling their services via a company); a reduction of regulatory burdens for online recruiters and agencies; a removal of requirement on agencies to agree terms with candidates and clients before introducing candidates; a change in the clarity of wording in advertisements; and the introduction of a "reasonableness" test for transfer fees and extended periods of hire, in particular for when workers move from temporary to permanent or vice versa, or from one agency to another.

The Additional Paternity Leave Regulations 2010

The Labour government was proposing new rules around additional paternity leave and pay that would enable eligible fathers to take up to 26 weeks' additional paternity leave.

The leave may be paid if taken during the mother's maternity pay period. Leave taken after this period has ended would be unpaid.

This new provision would be available in the second six months of the child's life, giving parents more choice and flexibility in child care responsibilities and a more equitable sharing of leave entitlements.

The scheme was designed to minimise the administrative burdens on business while allowing fathers a greater opportunity to be involved in raising their child.

Additional paternity leave and pay would also be available to partners and civil partners of mothers and to adopters where there is an entitlement to statutory adoption leave and pay. The child's mother must have returned to work before the father can begin his period of additional paternity leave or receive additional statutory paternity pay. This would give mothers the choice to go back to work and for fathers to take leave instead.

A date for extending maternity and paternity rights has not yet been announced, but the change is expected to come in April 2011.

Agency Workers Directive

It is intended to implement into UK law the EU directive on the equal treatment for agency workers. The aim of this directive is to ensure the protection of temporary agency workers by applying the principle of equal treatment, which provides that the basic working and employment conditions (such as the duration of working time, overtime, breaks, rest periods, night work, holidays and public holidays and pay) of temporary agency workers should be, for the duration of their assignment at a hirer, at least those that would apply if they had been recruited directly by that hirer to occupy the same job.

The directive allows for a qualifying period before equal treatment is applicable - in the UK this will be 12 weeks. The directive also provides other entitlements that aim to improve the situation for agency workers, for example in terms of improved access to permanent employment and training.

All EU member states are required to pass the necessary laws to implement the directive by 5 December 2011. With this in mind, the UK government would need the legislation in place by October 2011.

Business: Severe fines for data breaches

In response to concerns about the number of breaches of data protection law in recent years, the Ministry of Justice has announced its response to a consultation over increasing the penalties for breaking the data protection legislation.
 
From 6 April, the Information Commissioner was given the power, to levy a civil monetary penalty - a fine - of up to £500,000 on those "who either deliberately or knowingly seriously contravene the data protection principles".

Consumer Credit Directive

This legislation originates in Europe and member states have until June 2010 to transpose the directive into UK law. The changes are required because the nature of financial products has changed markedly over the 20 years since the first directive in this area.

The new directive seeks to harmonise and increase consumers' rights across the EU, introducing a range of new provisions. There will be some changes to UK credit legislation, for example, a new right for consumers to withdraw from credit agreements within 14 days without giving any reason; partially repay debt early; and receive a standardised pre-contractual information document about the credit product they are about to purchase. That said, the EU is not expecting this to radically change consumers' cross-border buying habits.

Digital Economy Bill

This bill was published in November 2009 and aims to put the UK at the "leading edge" of the global digital economy. It contains a range of measures to help the UK's knowledge-based economy. It also sets out the infrastructure and regulatory framework for the UK to be a "competitive digital knowledge economy".

The main elements of the bill include a Broadband Universal Service Commitment, which means everyone should have at least a 2Mb broadband connection, and Next Generation Access, in other words, newer and faster networks; reinforcing intellectual property protection by tackling illegal file-sharing; a new licensing regime to enable the wider commercial availability of orphan works; new Ofcom duties to promote investment in infrastructure and content alongside the promotion of competition; and ministerial powers to direct Ofcom to regulate the UK internet domain name system to prevent abuse. The bill should be law and in force early on in 2011.

'Silent calls' to be silenced

Firms that use automatic call systems to make calls on their behalf which result in nuisance calls that are silent are to have their wings clipped.
 
The problem of silent calls arises when calls are made without enough operators to handle the automatically pre-dialled numbers, leaving the receiver of the call with silence on the line. Late in October 2009, the government announced a consultation to reduce this problem by increasing the fines Ofcom can levy to a ceiling of £2m. The new fines came into force in April 2010.

Modernisation of insolvency rules

April 6 saw the new rules contained in the Insolvency (Amendment) Rules 2010 implemented. The changes introduce various measures to modernise insolvency processes to make it easier and simpler for insolvency practitioners and creditors alike.

The main elements cover the delivery of notices by electronic means (with consent of the recipient); making use of websites to send bulky reports and other documents to creditors; provisions to provide for the authentication of documents sent electronically (where there will be no original signature); replacing the need to have certain documents sworn with verification by a statement of truth; making provision for the court to limit disclosure of addresses in individual voluntary arrangements and bankruptcies for victims of violence; and a limited reduction in the requirement to file documents at court.

European Union Late Payments Directive

In April 2009, the European Commission published a new Late Payments Directive that amends legislation adopted in 2000. The updated directive gives public authorities 30 days to pay contractors or face financial penalties because they will have to pay compensation for recovery costs, and flat-rate interest of 5% of the amount due from day one of the delay.
Overall, the directive aims to improve the cash flow of European businesses. There is no date as yet for its introduction into law.

Things to come

Countless other changes are planned to come in over the next year or two, an awful lot of which are either highly technical or specifically for one business sector or industry. To find out more, visit and download the forward programme for yourself. Be warned: there are more than 65 pages to plough through.

Finally, a number of these measures were part of the Labour government's plan to reduce overall costs of compliance by 25%. The reform agenda is led by the Better Regulation Executive. If you have ideas to reduce the burdens on your business, why not go to the BRE website and suggest it?

 


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