Getting employment law wrong can be extremely costly. If you haven't done your preperation and taken the right advice then you could end up facing an employment tribunal, negative PR and a significant fine.

With increasing numbers of employees taking advantage of 'no win, no fee' solicitors to make tribunal claims against their employers, it's never been more important to have the right employment law solicitor.

Keep reading to learn more about changes to the employment tribunal system and why it's vital you get the correct employment law advice.

'Broken' employment tribunal system needed to be reformed

The employment tribunal system was originally designed to make the justice system simpler, more streamlined and less bureaucratic. However, with a growing number of claims and an increasingly wide range of types of claim, faith in the system had reached a low point in 2011.

A CIPD survey in March 2011 found that 69 per cent of employers said they had no effective protection against employees making wholly unjustifiable tribunal claims. Mike Emmott employee relations adviser, CIPD, said at the time "despite many attempts in recent years to find a solution, the volume of tribunal claims has increased and employers believe they have no protection against weak and speculative claims."

So, in April 2012, the government brought in changes to the tribunal system. Business Secretary, Vince Cable said: "For too long now the system in place for employment tribunals has been a bloated and bureaucratic obstacle for employers and the taxpayer.

"For employers they were finding that weak and vexatious cases were too much of the norm, too easy to bring forward, while for the taxpayer they were proving ever more expensive to run"

The Major employment tribunal changes in 2012

Regulations 2012. The most important changes you should be aware of are:

The main aim of these changes is to reduce the number of employment tribunal hearings and to deter vexatious or malicous claims. With an employee now having to pay £1,000 as a deposit and up to £20,000 in costs if their claim is not successful, the intention is clear - to stop false and speculative claims.

However, while these changes may result in fewer employment tribunals, it's still vitally important that you get specific HR advice for employers. Our experienced litigators are on your side and our job is to defend your actions and to achieve the best possible outcome for you in the circumstances. For more information on how we can help you, call us today on 0844 474 377

The main statutory rules on holiday rights are contained in the Working Time Regulations.

The basic right to annual leave is as follows:

• A worker is entitled to 5.6 weeks' annual leave (equivalent to 28 days for those who work five days a week) in each leave year. This is made up of:
• The right under the Directive to a minimum of four weeks' annual leave (20 days) each year.
• The domestic right to an additional by 1.6 weeks' annual leave (8 days) each year which represents the number of bank holidays in a year, but need not be used for them.
• A worker cannot be entitled to more than 28 days' statutory leave in a single leave year.
• A part-time worker is entitled to 28 days' holiday reduced pro rata, according to the number of days they work each week.
• No minimum period of continuous service is required to qualify for statutory annual leave.
• A worker whose employment begins part way through a leave year has a pro rata statutory holiday entitlement for that year.

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Key dates to note for the coming months:

1^st February:

• A week’s pay will increase from £400 to £430 for the purposes of calculating statutory redundancy pay and the basic award for unfair dismissal.

• The maximum compensatory award for unfair dismissal will increase from £68,400 to £72,300.

1^st April:

• Statutory maternity/paternity/adoption pay will increase from £128.73 to £135.45 per week

6^th April:

• Statutory sick pay will increase from £81.60 to £85.85 per week.
• The qualifying period for unfair dismissal claims will increase from one to two years.

5^th June:

• Queen’s Diamond Jubilee (additional bank holiday). The Spring bank holiday has been moved from the end of May to Monday 4^th June to create a four-day weekend.

1^st October:

• Automatic enrolment pensions and National Employment Savings Trust (NEST) commences for larger employers, to be phased in for other employers over four years.

A tribunal has recently awarded £67.8m to thousands of ex-Woolworth employees after the shop workers’ union Usdaw successfully claimed that administrators had failed to follow correct redundancy procedures when the stores were closed in late 2008/early 2009.

Usdaw claimed that administrators did not carry out collective consultation with the union prior to making the redundancies and therefore failed to meet their legal obligations. As a result, members of the union are set to receive a protective award of 60 days’ pay (capped at £400 gross pay per week).

Controversially, approximately 3,000 staff who worked in smaller stores employing less than 20 workers will not receive any compensation due to the current rules regarding collective consultation. UK employers are only obliged to consult collectively with unions or staff representatives where it is proposed to make 20 or more employees redundant within a 90-day period at one establishment

Usdaw national officer John Gorle commented “I’m bitterly disappointed that a tribunal has limited the scope of the award. The fact that some of our members won’t be compensated simply because their store had less than 20 employees is just plain wrong and shows the gaping loophole and injustice of the current legislation. Nearly 30,000 employees were made redundant from Woolworths at the same time and for the same reason, so to suggest 3,000 of them didn’t constitute a collective redundancy is a nonsense”.

The union has confirmed that it will appeal the decision.

Allocating holidays fairly across the workforce can often be a difficult and controversial task for managers, and it is never possible to please everyone. As in 2011, an additional bank holiday has been declared for this year creating a four-day weekend, which may lead to increased holiday requests around that time. In order to avoid as much confusion and frustration as possible, it is best to plan in advance how the extra day will be treated, inform staff of your policy on leave requests over the extended weekend and apply the rules consistently and fairly, for both full and part-time workers.

As bank holidays are classed as normal working days, an employer may opt, as many will, to keep the business open and staff due to work on that particular day will be expected to report for work as normal. If an employee wishes to take the day off, they can request a day’s paid holiday which they should deduct from their total annual allowance, although there is of course no obligation on the employer to grant it should business needs require the employee to be present.

To check whether payment must be made for the additional Diamond Jubilee holiday, employers should refer to their contracts of employment to check the wording used around the granting of bank or public holidays. For example, if the contract states that employees are entitled to 20 days’ paid annual leave plus all bank holidays, employees will be entitled to receive payment for any additional bank holidays which may be declared from time to time (although there is no entitlement to take the extra day on the bank holiday itself if the employer requires the employee to work). However, if the contract clearly states that holiday allowance is 20 days plus the 8 or usual bank holidays, there will be no entitlement to be paid for any additional bank holidays.

Holidays and bank holidays can be complex at any time with particular regard to part-time staff, and the granting of extra bank holidays only adds to the confusion. The fairest way of allocating holidays and bank holidays to part-timers is to give them a pro-rata amount of the full-time allowance. For example, if a full-time employee is entitled to 20 days’ holiday plus the 8 normal bank holidays per year, for someone who works 2.5 days per week, they would be entitled to receive 10 days plus 4 of the usual bank holidays. As in 2011 and 2012 where a full-timer may be eligible to receive an additional bank holiday, then the same part-timer should receive an extra 0.5 day for that particular year.

As from 1^st October 2012, larger employers will be required to automatically enrol all eligible workers into a qualifying pension scheme and to make a minimum level of contributions on behalf of those workers. The reforms have been introduced in an attempt by the Government to assist individuals in saving for their future retirement.

Existing pension schemes can be used as long as they meet minimum standards in relation to the benefits they provide or the amount of contributions paid, or employers can instead opt to use the Government scheme, NEST (National Employment Savings Trust).

Auto-enrolment will be introduced on a staged basis, starting with the largest employers (120,000 or more) this year, and rolled out to smaller businesses over the next few years, according to company size. The original timetable aimed to have the roll-out completed by April 2014, however for employers with fewer than 50 employees this has now been delayed until May 2015 in order to give more time to comply. It has been reported that the Government was forced to delay timings following calls from smaller businesses already facing financial hardship as a result of the current economic climate.

As a result of the reforms, employers will have to:

• enrol eligible workers into a qualifying workplace pension scheme;

• choose the qualifying scheme(s) they wish to operate;

• make a minimum 3% contribution into a defined contribution (DC) scheme or NEST, or offer membership of a defined benefit scheme.

An eligible worker is an employee aged between 22 and state pension age and earning above the income tax personal allowance (currently £7,475).

Where there is auto-enrolment into a DC scheme or NEST, there will ultimately be a minimum total contribution of 8% of qualifying earnings (currently set between £5,035 and £33,540), of which the employer must pay at least 3%. If the employer opts to contribute only 3%, the worker will pay 4%, with the remaining 1% paid as tax relief by the Government. However, these minimum contribution levels will be phased in between October 2012 and October 2017:

• October 2012 – September 2016: total minimum of 2% of qualifying earnings, with at least 1% from the employer;

• October 2016 – September 2017: total minimum of 5%, with at least 2% from the employer;

• From October 2017: total minimum of 8%, with at least 3% from the employer.

Although auto-enrolment is not an immediate issue for many employers, it is advised to establish the introduction date of auto-enrolment for your organisation sooner rather than later, to plan early and to get the right advice. General free advice can be found at www.pensionsadvisoryservice.org.uk

When the European right to a minimum period of paid annual leave was introduced via the UK’s Working Time Regulations (WTR), it was also provided that workers should not be able to carry over any leave into the next holiday year, nor should they be paid in lieu for any time not taken. However, for employees who are off due to long-term sickness and are unable to return before the end of the leave year, what should happen to any periods of untaken leave?

The EU Working Time Directive states that an employee’s right to paid statutory leave should be protected even when off sick, so their entitlement should continue to accrue during their period of absence. The employee then has the choice either to take paid annual leave during their sickness absence or to carry it over to the next holiday year with the intention of taking it when they have returned to work. As the Directive does not specify a time limit for carry-over, this leads to the possibility of employers being forced to make a substantial payment to an employee for several years’ of untaken leave if the employee does not return to work and employment is ultimately terminated. This is contrary to the provisions of the WTR which clearly prevents carry-over of the basic four weeks’ leave, unhelpfully causing uncertainty for UK employers.

However, some light may be at the end of the tunnel following the European Court of Justice’s (ECJ) recent decision in the German case of KHS AG v Schulte, which concerned Mr Schulte’s claim for the payment in lieu of untaken annual leave for the period of 3 years. Under German national law, there is a maximum 15-month carry-over period and the employer stated that, as a result of this, the employee was not entitled to make a claim for the full 3 years’ leave. The ECJ was asked to consider whether such a national rule, setting down a maximum period for carry-over of leave, went against the spirit of the EU Directive. It was held that EU law did not provide an entitlement to sick employees to carry over leave on an indefinite basis, and it is therefore lawful to impose a time limit provided that it is reasonable and “substantially longer” than the leave year itself. In the case of Schulte, a carry-over period of 15 months from the end of a leave year was deemed to be acceptable.

The UK Government has proposed, as part of its “Consultation on Modern Workplaces”, that employees who are absent from work due to long-term sickness should be able to carry forward the basic four weeks’ annual leave to the next holiday year, therefore amending the current provisions of the WTR. However, following the ECJ’s decision in Schulte, it is hoped that the Government will also set down a maximum carry-over period, after which point leave will be lost.

In the meantime, employers are advised to encourage employees to take paid holidays during periods of long-term sickness in the year to which the leave relates, in order to avoid claims for large sums if employment is later terminated. Another word of advice is to ensure that cases of long-term sickness are managed effectively so that employees are not absent from work for years at a time.