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Employment law: what’s changing in April?

It’s a bumper month for changes to employment law.  This article sets out the key changes that are implemented this month including government measures to close a number of the loop holes available to employers and employees with regard to tax relief.

Key changes in April include:

The introduction of the National Living Wage - As discussed in our February article, the new national living wage of £7.20 will be introduced for workers 25 years of age and over from 6 April 2016.  

An increase in Tribunal Award caps for unfair dismissal - The cap on a week’s pay is going up to £479 from April 2016.  The maximum cap on a basic award for unfair dismissal will therefore increase to £78,962.

New rules tightening up on postponement requests for tribunal hearings - For any claims brought after 6 April 2016 there will be a limit of 2 postponements per party, per case. Further postponements will only be granted in exceptional circumstances (e.g. ill health), unless both parties agree and the tribunal believes the postponement will facilitate settlement or that a postponement should be allowed due to an omission of the Tribunal or another party. The Employment Tribunal will also be required to consider a costs order where a successful application for a postponement is made less than seven days before the hearing.

The introduction of a financial penalty for failure to pay tribunal/settlement awards - Employers who do not pay employment tribunal awards or settlement sums due under a COT3 will, after a penalty notice has been issued, now be subject to a penalty of 50% of the unpaid award between a minimum of £100 and a maximum of £5,000. Employers will however qualify for a reduction in the penalty if they pay a reduced penalty and the whole unpaid amount within 14 days. With the new penalty employers will also face the risk of being publicly named.

Contracting out of the state second pension“S2P” abolished - From 6 April 2016 the current two tier pension scheme will be replaced by a single tier state pension. As a result, the ability for schemes to contract-out on a salary-related basis will also disappear. Schemes that are currently contracted-out on a salary-related basis will, therefore, automatically cease to be contracted-out from 6 April 2016. Members and employers of contracted-out schemes currently pay lower rates of National Insurance in return for not participating in S2P. With the abolition of contracting-out, employers and members will automatically revert to paying the full rate of National Insurance contributions (NIC).

Modern slavery - As the new financial year is upon many companies this month, it is important to remember the new legal requirement for organisations with a global turnover of £36million or above to prepare a slavery and human trafficking statement for each financial year. The statement should state what steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains and in any part of its own business, or importantly, that the organisation has taken no such steps. If the organisation has a website it should publish the statement on that website and include a link to the slavery and human trafficking statement in a prominent place on that website’s homepage.

The above information is simply an overview of the changes being introduced. Particularly with regard to financial matters we would recommend appropriate legal or financial advice is sought.  

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