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Employment law changes: Sick pay & tribunal penalties

A variety of employment law changes took place this April, some being regular yearly updates but others introducing significant new rules. I’ll outline the nature of these changes and how they could affect your business.

Small businesses can no longer reclaim statutory sick pay

If you’re a small business owner like me, you may be surprised to hear that it’s no longer possible to reclaim statutory sick pay (SSP) that you have paid out. Until 6th April 2014, employers who suffered from high levels of sickness absence were able to reclaim a portion of their SSP payments under the Percentage Threshold Scheme (PTS). This has now been abolished, meaning that small businesses will have to foot the bill of SSP entirely by themselves. The government has proposed to replace the scheme with a new Health and Work Service which will provide advice to employers and employees, along with health assessments and treatment plans. But this service probably won’t be up and running before 2015 and I doubt it will be enough to placate small businesses who are hit by the abolition of PTS.

Acas early conciliation: what it means for your business

I suspect there are few small business owners who don’t dread the prospect of an employment tribunal. So the new “early conciliation” rules, which mean that any employees thinking of making a claim first need to contact Acas in order to consider the possibility of resolving the matter without going to a tribunal, will probably be welcomed by small businesses. Although it’s compulsory for employees to contact Acas and wait for at least a month before taking any claim to an employment tribunal, actually making use of the conciliation service is voluntary, both for employees and employers. However, according to independent research, the cost of using conciliation is under £500 for employers, as opposed to £3,700 for defending an employment tribunal – so in most cases the choice will be a bit of a no-brainer for employers!

Tribunal penalties and statutory increases

It’s that time of year again when employers need to bite the bullet and implement the latest statutory increases. As of 6th April 2014, maternity, paternity and adoption pay rose to £138.18 (from £136.78) a week and sick pay was bumped up to £87.55 (from £86.70) a week. The latter change will come as a double whammy to any businesses already affected by the abolition of PTS which I discussed earlier.

Another blow for small business comes in the form of higher employment tribunal awards. The maximum compensatory award for unfair dismissal was increased to £76,574 (from £74,200) whilst the maximum statutory redundancy payment went up to £13,920 (from £13,500). Furthermore, as of 6th April 2014, employers who lose a case at an employment tribunal can be ordered to pay a penalty of between £100 and £5,000, making the option of Acas early conciliation even more attractive.

With all these employment law changes, it’s a good time to review your employment documents and policies to ensure that your business is in line with the latest rules. The Rocket Lawyer business documents documents include a range of HR policies and procedures and you can find help on employment issues in our specialist legal hub.

Alex Heshmaty

Alex Heshmaty is an experienced legal writer, with a particular interest in the field of employment law. He writes for a variety of publications and his articles have appeared in The Guardian as well as regularly being featured in the Internet Newsletter for Lawyers.
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