Employment law for FE – all change this year?

There have been a number of proposals put forward by the Government in recent weeks that will affect colleges should they be enacted. The Government is consulting on proposals to reduce compensation limits for unfair dismissal as well as giving guidance to employees on how to facilitate settlement agreements in the workplace. There is also further consultation on a revised sickness absence strategy, collective redundancy changes as well as proposals to make TUPE easier to apply in practice. All in all, a busy year lies ahead. So what should colleges be aware of and how can they prepare for any changes?

The year of 2013 will see long awaited legislative reforms brought forward by the coalition Government with a view to ‘scrapping, merging, simplifying or improving’ employment law. The governmental objective is dual, namely consolidating employees’ fundamental rights and making it easier for companies to employ.

A recurrent theme of the proposals is to reduce the amount of disputes that get to an Employment Tribunal hearing. The Enterprise and Regulatory Reform Bill is hoping to achieve this by offering Pre-Claim Conciliation (PCC), a compulsory period of one month during which parties must present details of the dispute to ACAS, the body dedicated to solving employment disputes through alternative means. Parties must attempt to conciliate under the guidance of ACAS before presenting any claim to an employment tribunal.

The bill also provides that PCC will ‘stop the clock’ on the time period for lodging a claim in the tribunal. Colleges should therefore make use of this period as a chance to assess the merits of any claim.

The bill goes further to provide that settlement negotiations to agree termination of employment carried out before a dispute even existed cannot be used in unfair dismissal proceedings. This in effect extends the principle of ‘without prejudice’ communications to pre-emptive dealings between an employer and an employee, as long as an issue of automatic unfair dismissal has not arisen or the employer has not acted improperly.

What amounts to improper behaviour is currently under consideration by ACAS and will soon be published in a Code of Practice, together with some non-compulsory template letters and a model settlement agreement. While this may encourage parties to have a constructive dialogue on how to approach a potential employment dispute, colleges should ensure that an employee does not interpret communications of this nature as an anticipation or admission of fault.

The principal aim of the reforms is to give certainty to the parties on the likely financial value of a dispute. From 1 February 2013 a new limit to compensation for unfair dismissal claims will come into force, equivalent to either 12 months’ pay or to £74,200, whichever is the lower.

While in the education sector claims are largely for much smaller amounts, the average unfair dismissal award being less than £5,000, this provision is thought to bring a sense of realism amongst employees who wish to claim compensation.  However, colleges should be wary that the settlement cap does not become the award of reference that an employee can aspire to claim, and it would therefore help for them to discourage an aggressive claim culture by applying employment policies appropriately and addressing any grievance raised by an employee in a timeous manner.

A review of workplace sickness absence, another topic of great debate, has now been approved by the Government. The review includes the establishment of a state-funded assessment and advisory service together with health assessments of employees carried out by occupational health professionals. The service will be triggered by four consecutive weeks of sickness absence and, should an employee fail to engage with the service, he or she will not be issued fit notes.

Part of the service is also to provide guidance on overcoming the barriers that prevent return to work to the employee. Should the employee decide not to return to work, the service could refer an employee looking for alternative work to an online job-matching service. Colleges should therefore be able to access more accurate and updated information on an employee’s state of health, which is expected to benefit their strategic allocation of staff according to an employee’s potential.

Collective redundancies have been the norm in colleges in recent years given that massive funding cuts that have beset the sector. From 6 April, the 90 day minimum collective consultation period before the first redundancy can take effect will be reduced to 45 days where 100 or more employees are affected. Further, employees on fixed term contracts which have reached their agreed termination point will also be excluded from collective redundancy consultation obligations. Helpful news for colleges.

Whilst TUPE is not something that is ordinarily part of a college’s day to day activities, it does occur from time to time, particularly in relation to outsourcing of certain functions. A proposed reform of TUPE should make the administration of human resources easier and practical. The proposals include making information that needs to be given to a potential new employer sooner than is currently provided as well as establishing whether employee liability should pass entirely or should remain jointly and severally between the outgoing employer and incoming employer.

All in all, interesting times lie ahead.

Matthew Kelly is a partner at law firm Thomas Eggar, which handles a wide range of related litigation, such as issues relating to FE governance and capital projects