HMO QUARTERLY EMPLOYMENT BULLETIN
December 2008

INCREASE IN THE AWARDS IN THE EMPLOYMENT TRIBUNAL
On the 1st February 2009 the limits applying to certain awards of Employment Tribunals and other amounts payable under Employment Legislation will change.  There are eight changes in total the key of which are:

• Maximum amount of a week’s pay for the purpose of calculating redundancy and  the basic award for unfair dismissal increases from £330 to £350.
• Upper limit on the amount of a compensatory award for unfair dismissal increases from £63,000 to £66,200.
• Limit on amount of guarantee payment in respect of any day increases from £20.40 to £21.50.

The increases apply where the event giving rise to the entitlement to compensation or other payments occurs on or after the 1st of February 2009.

REMINDER AS TO NATIONAL MINIMAL WAGE INCREASES
It is worth checking that you have implemented the increases which came in on the 1st October 2008 as follows:

• For workers aged 22 or over from £5.52 to £5.73.
• For workers aged between 18 and 21 from £4.60 to £4.77.
• For workers under 18 from £3.40 to £.53

COMPROMISE AGREEMENTS
In the current circumstances few employers will be unaware of Compromise Agreements.  These are Agreements signed by employers and employees who are parting company whereby the employee agrees to give up their rights to make a claim against the employer in return for a speedy termination payment and possibly other benefits such as the continuing use of a motor car for a period of time.  A basic check list for items to be included is as follows:

• Date of termination of the employment.
• The claims which the agreement is intended to settle.
• The sum to be paid and when it is to be paid.
• The return of Company property.
• Tax due on the termination payment.
• What contribution to the employee’s legal fees is to be paid by the employer?
• What if anything is to remain confidential?
• What the employee promises to do and not to do after he leaves?
• A reference.
• In what circumstances the employee can be required to repay the money received (and possibly damages).

Care must be taken in broaching the subject of a Compromise Agreement with an employee (always take legal advice) and if you wish to restrain the employee following his departure in order to protect your business very careful drafting is required if the agreement is to achieve what you intend (again seek legal advice here).

In order to be binding, and therefore to protect the employer, Compromise Agreements do have to be in a specific form and the employee has to have received independent legal advice a fact which is now usually recorded in the Agreement.

Compromise Agreements usually move apace and a well drafted agreement will oil the wheels of this process making it as painless as possible for both parties.

EMPLOYERS IN TRIBUNAL CLAIMS WILL HAVE DETAILS DISCLOSED
There are many reasons as an employer to avoid facing claims in the Employment Tribunal against the business.  Another has risen.  In October 2004 public access to parties details was abolished by the 2004 Tribunal Rules of Procedure but now the Information Commissioner has exercised powers to override these Rules by ruling that there can be a public interest in the disclosure being made.  This decision relates to a Respondent’s details that is an employer’s details.  Therefore the way is open to individuals or insurance companies to seek to discover details of claims against employers. 

HEALTH & SAFETY FOR EMPLOYERS
A new Act (Health & Safety (Offences) Act 2008) comes in to effect on the 16th January 2009.  It does not create any new offences but raises the maximum penalties available to the Courts in respect of many Health & Safety offences.  It also increases powers to imprison.  Most offences now become imprisonable (12 months in the Magistrates Court and 2 years in the Crown Court).  Further the Act will increase the maximum penalty available in the Magistrates Court to £20,000 for most Health & Safety offences. 

If you face an investigation for a Health & Safety offence it is crucial that you have representation at the stage that you are interviewed by the Health & Safety Team.  This will be your opportunity to explain your defence or to put in your mitigation which is the springboard for your Solicitor then making representations before a decision has been made as to whether to summons or charge the Company, the Directors or its officers.

THE STATUTORY DISMISSAL AND DISCIPLINARY PROCEDURE
Just as we are getting used to, but not necessarily comfortable with, the minimum statutory procedure to be adopted in disciplinary and dismissal processes this controversial piece of legislation is to be replaced by a Statutory Code of Practice.  This runs to 45 paragraphs and has (reluctantly) been drafted by ACAS.

The Code is still in draft form and subject to implementation.  This is therefore advance notice that during the course of 2009 the existing procedure will be redundant and the new procedure will take its place.

The Code of Practice covers both disciplinary and grievance procedures and will be the bench mark against which your internal procedures will have to be reviewed to check that they are compliant.  We anticipate covering this area in further detail in our March ebulletin.

Nigel Pepper, Consultant    Patrick Nelson, Associate

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Telephone : 01785 211411

This article is for the purpose of general awareness only and the law may have changed  since it was originally published.  It does not constitute legal or professional advice and readers should not act on the basis of the information included.  Readers should take appropriate advice upon their own particular circumstances.