Hand Morgan & Owen Employment Bulletin – Spring 2023
INCREASE IN TRIBUNAL LIMITS
In accordance with The Employment Rights (Increase of Limits) Order 2023, there will be the following increases to the limits of compensation in Employment Tribunal claims:
- Compensatory Award: Increasing from £93,878 to £105,707
- A week’s pay for the purpose of calculating the Basic Award : Increasing from £571 to £643 (this figure is also used to calculate statutory redundancy payments).
These changes take effect from 6 April.
NATIONAL MINIMUM WAGE
From 1 April 2023 the National Minimum Wage rates will increase as follows:
- For workers aged 23 or over from £9.50 to £10.42 per hour
- For workers aged 21 to 22 from £9.18 to £10.18 per hour
- For workers aged 18 – 20 from £6.83 to £7.49 per hour
- For workers under 18 and apprentices from £4.81 to £5.28 per hour
This is a substantial increase (in line with inflation) and employers should carefully monitor the salaries of lower paid employees to ensure they do not fall below this rate.
EFFECTIVE DATE OF TERMINATION
Identifying the Effective Date Of Termination (also known as EDT) can be an important issue in Employment Tribunal claims where an employee is close to the 3 month time limit for commencing proceedings.
In the Employment Appeals Tribunal case of Meaker v Cyxstera Technology UK Limited the EAT considered whether a without prejudice letter purporting to communicate a mutually agreed termination, where no agreement had been made, could amount to an effective termination letter, and as a consequence the Claimant’s unfair dismissal claim being out of time.
In this case, the Claimant had been off work for an extended period on account of a back injury and was sent a letter headed without prejudice stating that it had been agreed that there would be a mutual termination of employment with his last day of employment being 7 February (the letter was posted on the 5th and received on the 7th). The letter offered an ex-gratia payment subject to the Claimant signing an enclosed Settlement Agreement.
Whilst the Settlement Agreement did not proceed, and the letter was marked without prejudice, the EAT accepted the finding of the Employment Tribunal that the letter had unambiguously communicated that the employer intended to unilaterally terminate the employment with effect from 7 February and that it was only the offer of an ex-gratia payment was conditional on the employee signing a Settlement Agreement.
WAITING TIME FOR EMPLOYMENT TRIBUNAL HEARINGS
In response to a question from Angela Rayner, Mike Freer the Parliamentary Under Secretary of State for Justice has provided some interesting information on the waiting times from a Claimant issuing an Employment Tribunal claim to the date of the first hearing between 2010 and 2022.
The waiting times were broadly around 30 weeks between 2008 and 2018. In 2019 (prior to the Covid difficulties) it increased to 38 weeks and as of March 2021 (the most recent figures) there is a remarkable 49 week wait between a Claimant issuing their Tribunal Claim and their first hearing.
This suggests that many Employment Tribunal claims will do well to be concluded inside 12 months, which is a worrying statistic for Claimants.
DISMISSAL AND RE-ENGAGEMENT
BEIS (Department for Business Energy & Industrial Strategy) has published a draft code of practice for the process of dismissal and re-engagement. A copy of this can be found here .
The code is intended to set out good practice when employers seek to negotiate or impose changes to an employee’s terms and conditions. A failure to comply with the code, once enforced, will be taken into account in any unfair dismissal claim caused by the dismissal of those who do not agree to the contractual changes. A reasonable failure to comply can result in an uplift to an unfair dismissal award of up to 25%. Some interesting points include:
- A recommendation that the employer actively re-examines its business strategy in light of the potentially serious consequences for employees.
- A recommendation to share information.
- That where there are multiple changes to terms and conditions these should, where possible, be implemented over a period of time with a need for change kept under review.
The draft code should be helpful for employees looking to resist or delay the process by which employers can impose terms by threatening to dismiss and re-engage.
22 March 2023
For advice and assistance in respect of Employment matters contact Patrick Nelson, Associate on 01785 211411.
Disclaimer
The contents of this article are for the purpose of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.