Employment Law Changes in 2012

Employment law is ever changing and there are several changes scheduled for 2012. These include changes in laws related to unfair dismissals, changes to statutory pay, pension changes and income tax changes.

There will be a number of employment law changes in 2012 related to unfair dismissals; those regarding tribunals, possible compensation and time after which someone cannot be dismissed without good reason. There are plans for the process of unfair dismissals to be simplified. This will include changing from the current system of a panel hearing cases to them only being held in front of a tribunal Judge. This could speed up the process, especially in relatively straightforward cases. Where someone is deemed to have been dismissed unfairly there is a maximum amount of compensation they can receive. This is currently £68,400 but will be increased to £72,300 later this year. A significant change is that the time after which someone can be dismissed without an adequate reason, such as not performing as expected or redundancy, is changing. Currently someone cannot be asked to leave after a year of employment, but this is doubling to two years. This will apply to employees who begin work after 6th April. The reason that has been given for this is that some employers have claimed it is difficult to employ people if they are not certain they will require them long term. With this changed it is hoped more jobs will be created with businesses able to employ someone knowing they can ask them to leave if they realise they are not required. There have been criticisms though, with some claiming it makes it too easy to sack people for no obvious reason.

Another change in law is that statutory payments will be increasing in 2012. The statutory rate for maternity leave and paternity leave is set to rise from £128.73 a week to £135.45 a week, with sick pay to rise from £81.60 to £85.85.

Over the next few years there will be changes to company pensions and this begins this year. Eventually all employers will be required by law to enrol all employees into a pension scheme. This will be happening gradually over the coming years, with the date at which this must be done dependent on the number of employees. Larger companies will have to enrol their employees this year.

There will once again be income tax changes this year. Employees currently start paying income tax once they earn over £7,475 but this is increasing to £8,105. This means everyone will start paying income tax at £630 higher than they did in 2011. For most this means saving £126 in total over the year, or £10.50 a month. This doesn’t benefit those earning over £35,000 as the rate at which employees begin to pay 40% income tax is coming down from £37,402 to £35,001. This means those effected will be paying more at this rate meaning they will pay more income tax overall. The Additional 50% tax rate will continue to begin at earning of £150,000.

Above are the key employment law changes that will happen in 2012. There will be others as well though. Professional drivers will now be entitled to eye tests every five years to be paid for by their employers. This will affect lorry driver, bus drivers and taxi drivers amongst others. Flexible working will be introduced for all employees, something that currently applies to those who have children or are carers. This will mean that everyone will have reasonable access to flexible working, for example flexible working hours. Finally, there will be more flexibility with maternity and paternity leave, with more choice over when leave is taken. Parents will be able to decide whether to take leave at the same time as each other or at different times, and whether to take it in one block or not.

Andrew Marshall ©

Employment Solicitors Hampshire