Don’t look back in anger but forward in hope—A review of 2012 and a sneak preview of 2013 and beyond

Following the Chancellor’s Autumn Statement it seems as though the current period of austerity is set to continue throughout 2013. But what impact will this have on business employing people?

From an employer’s perspective, it is easy to look back on the various changes in employment law with a touch of anger at the seemingly continual negative impact on businesses. However, whilst the perception is that the Government continues to penalise small businesses, not all changes should be viewed like this.

2012 saw a number of changes being brought in by the Government that would have some effect on businesses that employ staff. In April, there were increases in the basic level of statuary sick pay together with increases in the basic amounts associated with family friendly policies such as the levels of statutory maternity, paternity and adoption pay.

Also in April, there were a number of reforms to Employment Tribunal procedure – and in particular changes to both the amount of a deposit order and of a costs order.

In October, the new pension regulations kicked in, although these won’t impact on SMEs until February 2014 and small businesses (those with fewer than 50 employees) until at least April 2015. This will, of course, have a financial impact of businesses and it would be prudent for employers to start to consider this now rather than be caught out as their auto-enrolment date looms upon them.

As always, it seems, changes in legislation appear to have a potentially negative impact on employers, resulting in additional administration or increased costs.

However, one change that took place in 2012 has the opposite effect. In April, the qualifying period for unfair dismissal claims increased from 12 months to 2 years (this only applies to employees who started on or after 6th April 2012). This gives employers a longer period to fully assess an individual, making it easier to dismiss within that period without the worry of a potential claim for unfair dismissal.

It should be noted however, that claims for reasons of discrimination against employees can still be made without any qualifying period at all and thus awareness of and careful attention to the protected characteristics under the Equality Act of 2010 should be maintained at all times.

So, what of 2013? What plans does the Government have regarding employment? Can we look forward in hope?

In February, the Employment Tribunal award limits will rise – both in terms of the value of a week’s pay and the maximum compensatory award for unfair dismissal.

In addition to this, there are proposals to introduce employment tribunal fees in the summer of next year for an issue, a hearing and an Employment Appeals Tribunal issue. The idea behind this is to deter frivolous claims. However, the expected levels of these fees are relatively small and are unlikely to deter many of the somewhat spurious claims that are presently submitted.

There are many other possible changes under discussion and which I will write about if and as they occur during the year. For me, however, the potential change that is likely to hit small businesses most going forward is the flexible parental leave proposals recently announced by the Deputy Prime Minister, Nick Clegg. Whilst not likely to happen until 2015, it is important to highlight this now in the hope that organisations such as the Federation of Small Businesses can become involved in discussions at an early stage to protect its Members.

Under the new rules, a mother will be able to trigger flexible leave at any point – if and when she feels ready. That means that whatever time is left to run on her original year can be taken by her partner instead. Or they can chop up the remaining time between them – taking it in turns. Or they can take time off together – in other words, whatever suits them. The only rule is that no more than 12 months can be taken in total, with no more than 9 months at guaranteed pay. And, of course, couples will need to be open with their employers, giving them proper notice.

The Government is continually preaching that it is the growth of the private sector and, in particular, small businesses that will pull the country out of recession. This proposal shows, in my opinion, a Government that is totally out of touch with the way small businesses operate and the issues that they have to deal with day-on-day, week-on-week.

I will write more on this as proposals develop through next year but small businesses should be warned and it is to be hoped that organisations such as the FSB will listen and move to protect members.

On a more personal level, Turnstone HR has steadily grown its client portfolio throughout 2012 and we hope to maintain this trend during 2013 by continuing to deliver our very bespoke HR advice and support service to clients. We also intend to step up our activities in both training and recruitment throughout 2013 and further broaden the services that we offer.

To all businesses, large or small, the Turnstone Team extends its best wishes for a Happy Christmas and we hope that 2013 is good to you.