New employment legislation takes effect

In April 2009, a number of significant legislative reforms were introduced in the UK, some of which were influenced by the new Employment Act 2008. Reforms include the wider coverage of flexible working rights, stronger measures to enforce the national minimum wage including penalties for employers that underpay, new workplace disputes procedures and increased statutory holiday entitlement.

On 6 April 2009, a range of employment law reforms took effect in the UK, in some cases following the adoption of the Employment Act 2008 (UK0812019I). The key legislative changes are highlighted below.

Flexible working rights for parents of older children

From 6 April 2009, under the Flexible Working (Eligibility, Complaints and Remedies) (Amendment) Regulations 2009, the statutory right of employees to request flexible working arrangements from their employer has been extended to the parents of children up to the age of 16 years. This right previously applied only to parents of children under six years of age or to those of disabled children under 18 years of age, as well as to employees with adult dependants. The change means that an extra 4.5 million parents now have the right to ask for flexible working, in addition to the six million parents and carers already eligible.

During the autumn of 2008, it was reported that the extension of the flexible working legislation might be postponed as part of a review aiming to ease the impact of regulation on businesses during the economic downturn (UK0901019I). However, the government’s commitment to widening the coverage of the legislation survived this process.

Employment Relations Minister Pat McFadden said in this regard:

Flexible working has been a great success…Firms can still say no if they have legitimate business concerns, but more than 95% of all requests for flexible working from working parents and carers are now accepted…Parenting doesn’t end as children get older. Extending the right to request will help more parents get the flexibility they need. The business benefits of flexible working are well documented and this remains the case in tougher economic times.

The Trades Union Congress (TUC) welcomed the change. The Confederation of British Industry (CBI), while accepting the extension of the legislation, was reported to have favoured delaying its implementation because of the current economic recession. However, not all employers share this view. Writing in The Guardian newspaper on 21 April 2009, the Human Resources Director at T-Mobile, Mark Martin argued that ‘we are actually at an ideal juncture to take positive steps to overhaul our working culture’, and that the new legislation ‘is an opportunity for economic growth and profitability and should be embraced by businesses’.

Penalties for underpayment of national minimum wage

Following the passage of the Employment Act 2008, new penalties have been introduced for employers who underpay on the national minimum wage (NMW) (UK9904196F).

From 6 April 2009, if HM Revenue and Customs (HMRC) officials find that there has been an underpayment of the NMW, they may issue a notice requiring the employer to repay arrears to the workers concerned and to pay a financial penalty to the government. The penalty is set at 50% of the total underpayment but there is a minimum penalty of GBP 100 (€113 as at 21 April 2009) and a maximum penalty of GBP 5,000 (€5,664). Employers who comply fully with the notice of underpayment within 14 days will receive a 50% discount on the penalty.

Workers are now entitled to have NMW arrears repaid at current NMW rates where these are higher than the rate that applied when the arrears arose.

The new legislation also gives HMRC compliance officers new inspection powers and strengthens the criminal regime for NMW offences.

New framework for resolving workplace disputes

With effect from 6 April 2009, the statutory discipline and grievance procedures introduced in 2004 (UK0408102F) under the Employment Act 2002, as well as the provisions in the Employment Relations Act 1996 relating to procedural unfairness in dismissal cases, have been repealed.

In their place, the Employment Act 2008 requires compliance with a statutory code of practice on procedures for the resolution of disputes produced by the Advisory, Conciliation and Arbitration Service (Acas). Employment tribunals will be able to adjust awards by up to 25% where the parties have unreasonably failed to comply with the code.

The central aims of these changes are to simplify the system for dealing with workplace disputes and reduce the number of employment tribunal claims. A future EIRO information update will review the new arrangements in greater detail.

Increased statutory holiday entitlement

Finally, as of 1 April 2009, the minimum legal entitlement to paid holidays has been increased from 4.8 to 5.6 weeks a year. This represents an increase from 24 to 28 days for a full-time worker on a five-day working week, with pro-rata increases for part-time workers, and is the second stage of a phased increase (UK0707059I). The TUC estimates that the move will benefit two million employees, many of whom are low-paid women, working part time. It believes that this extra holiday entitlement ‘will help to address our long hours working culture, which is stopping many people from enjoying a proper work–life balance’.

Mark Hall, IRRU, University of Warwick

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