All change for employment law – a welcome change for FE?

A plethora of new legislation has or shortly will come into force in employment law, which will affect FE colleges up and down the country.

Significant changes are also planned to take effect in the course of the next 18 months. So what does this mean for colleges as a whole? Will it simplify processes? And will it make it easier for colleges to implement vital changes necessary to ensure their continued survival?  Here are some important points to note and to action, where necessary.

Collective consultation

One of the key changes that came into effect on 6 April 2013 relates to the time when colleges must collectively consult with appropriate representatives of affected employees, usually trade unions. Previously, if a college proposed to dismiss as redundant 100 or more employees within a 90 day period then the obligation to collectively consult was for 90 days before the first dismissal took effect. This has now been reduced to 45 days. This is clearly welcome for colleges facing budgetary constraints.

It is often the case that colleges do not get final funding allocations until the eleventh hour, by when it may be too late to start a collective consultation process that could result in significant redundancies. It remains the case that colleges must consult collectively for 30 days where 20 or more dismissals are proposed within a 90 day period.

However, the reduction from 90 to 45 days for large scale redundancies (which could also potentially include a dismissal and re-engagement process to change terms and conditions of employment) must surely be welcomed. Previously, unions remained steadfast in prolonging the process as much as possible.

Now that the time limit has become significantly truncated, colleges will have greater leeway to carry out restructures and/or redundancies more speedily than has historically been the case. Colleges should check that there are no contractual redundancy procedures in place that replicate the old law so as to avoid any breach of contract claims should a 45, and not a 90, day consultation period be followed.

Colleges should also be aware when collectively consulting that there is an obligation to inform the recognised trade unions of information relating to agency workers, specifically the number of agency workers working for the college, the parts of the college in which they are working and the type of work they are carrying out. In Unison v London Borough of Barnet and NSL Ltd and Unison v Capita Business Services Ltd, the employment tribunals awarded 60 and 45 days’ pay per affected employee for failing to comply with this requirement. The cost can be significant.

Tribunal Fees and pre-claim conciliation through ACAS

One of the most radical changes to employment law for 40 years will come into force in Summer 2013, namely the payment of fees for lodging tribunal claims. The more cynical reader may consider that it costs nothing to lodge a tribunal claim so there is no harm in lodging one, whether there is any merit in the claim or not. Costs are seldom given so why not put a claim in? This may all soon change. The lodging of a claim will now cost around £200 depending on the complexity of the claim itself. Should the case proceed to hearing, it could cost £1,000 to hear the claim. There is limited scope for getting this money back.  Those who advise colleges with tribunal claims are eagerly awaiting the final version of the rules that will implement this piece of legislation.

New introductions that will come into force in April 2014 relates to pre-claim conciliation whereby ACAS must be involved before an employee issues proceedings in the employment tribunal claim. Statistics have shown that employers save on average £2,700 compared to resolving a dispute once an employment tribunal claim has been made.

The intention is that prior to issuing a claim, both parties enter into this process for a one month period. During that time, ACAS’s role is to try and reach an agreement with both parties. If agreement cannot be reached by the end of the period, then an employee is free to issue a claim in the tribunal. Whilst the compulsory conciliation process runs, all time limits that would ordinarily apply in respect of Tribunal proceedings (such as lodging a claim within three months of a dismissal or discriminatory act complained of) are stayed pending conclusion of the conciliation process.  It is easy to see that this will no doubt cause issues on a tribunal having jurisdiction to deal with a complaint and whether an employee presents a claim out of time. No doubt case law will need to determine the ambit of this issue.

It is anticipated that this, along with having to pay a fee to bring a claim, will either deter employees from bringing claims or else focus a party’s minds on the situation before proceedings are commenced.

Settlement Agreements

Colleges, like most employers, are cognisant of the fact that litigation is never cheap. It is also extremely time consuming. One of the changes due to be implemented should enable some claims to be nipped in the bud before disgruntled employees take colleges to tribunal. In legal terms, this is referred to as a “pre-termination negotiation”, which will ensure that anything said as part of that process cannot be subsequently admitted as evidence in a tribunal claim.

Currently, if there exists a legal dispute between a college and an employee, parties can enter into without prejudice conversations to effect lawful terminations. The concept of “without prejudice” has been around for years. However, for a conversation to be truly without prejudice there needs to exist a legal dispute between the parties at the time of entering the discussion. This is often difficult to establish in legal terms. The purpose of the pre-negotiated settlement will be to avoid arguments about a conversation being truly “without prejudice”.  Whilst broadly welcomed, it could again open up a whole can of worms.  Conversations to settle claims involving whistleblowing allegations or discrimination claims could not be settled through this medium.

All in all, a busy time lies ahead.

Matt Kelly is a partner at Thomas Eggar, the law firm