Employment Law Update April 2005
Information & Consultation with Employees
On 6th April the new Information and Consultation of Employees Regulations were introduced. The legislation gives workers the right to be informed about various issues including their employers' financial situation and their own employment prospects, and to be consulted about anything liable to lead to major changes, such as restructuring, pay and redundancies.
Currently this legislation only applies to firms with at least 150 employees but from April 2007 those with 100 employees will be affected, and from April 2008 those with at least 50 employees.
Firms are, however, only under an obligation to set up such procedures if a valid demand is made by at least ten per cent of its workforce. If the employer fails to comply with such a request, the Central Arbitration Committee has the power to order the employer to comply with the new legislation. If the employer again fails to comply, the EAT can impose a fine of up to £75,000.
Other Statutory Changes
Statutory Sick Pay
As of 6th April 2005 this has increased from £66.15 to £68.20 a week.
Statutory Maternity, Paternity and Adoptive Leave Pay
From 3rd April 2005 this has increased from £102.80 to £106 a week.
National Minimum Wage
- 22 + Over: Currently £4.85.
- As of 1 October 2005 will increase to £5.05
- As of 1 October 2006 will increase to £5.35
- 18- 21: Currently £4.10
- As of 1 October 2005 will increase to £4.25
- As of 1 October 2006 will increase to £4.45
Case Law: Collective Redundancy
A recent decision from the European Court of Justice clarifies an important area of Employment law relating to collective redundancies.
When an employer is proposing to make redundant 20 or more employees in one establishment, legally it must consult with its employees. This Consultation must take place in good time - a minimum of 90 days for 100+ employees, or 30 days for 20-99 employees, before the first dismissal takes place. Such consultation must cover; (i) ways of avoiding dismissals, (ii) reducing the number of dismissals and (iii) mitigating the consequences of the dismissals.
The case of Junk v Kuhnel which originated in the German courts related to a company who had given notice to their employees terminating employment prior to the end of the 90 day consultation period, so that at the end of that period the employees would immediately be made redundant. Ms Junk argued that the consultation had been defective and that her redundancy was therefore ineffective.
Previously the prevailing view had been that when making collective redundancies, provided consultation on ways of avoiding dismissals had been carried out, notice terminating the employment could be given prior to the end of the statutory consultation period. Following the ECJ's decision this is no longer correct.
This case which is binding throughout the EU means that notice can not be served by employers until after the end of the statutory consultation period (whether this is 30 or 90 days, depending on the number of redundancies).
Other Matters: DTI Consultation
The Department of Trade and Industry has issued a consultation paper seeking views on plans to extend maternity leave and other rights. The proposals include:" extension of maternity and adoption pay from the current 6 months to 9 months by April 2007, with the goal of a years paid leave by the end of the next Parliament;" a new right for mothers to transfer a proportion of their maternity leave and pay to the father;" extending the right to request flexible working patterns to new groups including carers of adults and parents of children up to age 17 (the current age limit being 6);" helping employers by extending the notice period mothers are required to give when returning to work, especially if earlier than planned;" simplifying the administration of maternity leave and pay for employers, including a direct payment scheme administered by the Inland Revenue.The consultation is due to end on 25 May 2005, and the consultation documentation is available on the DTI website.
If you would like advice on any employment issue please contact Karen Wallace on 020 7623 9490 or by email to wallacek@s-yj.co.uk
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