Employment law update
A controversial proposal to allow compensated no-fault dismissals appears to have been shelved, because it received only limited support from business.
As an alternative, the Government has published details of a fast-track settlement scheme where employees can be asked to walk away by mutual agreement and, in return for their co-operation, receive a payout and possibly a reference – but they would forfeit their right to make any future claims against the employer.
Employee qualifying periods change
From 6 April 2012 the qualifying period for which employees must have been employed before they can claim unfair dismissal has increased from one to two years. However, this change only applies to employees taken on from 6 April this year. Despite the change, employers should be cautious when dismissing new employees because there is no qualifying period for an unfair dismissal claim based on, for example, discrimination or whistle blowing.
Compulsory retirement not necessarily age discrimination
The outcome of a recent age discrimination case heard by the Supreme Court was that, despite the abolition of the default retirement age, employers can still set the age at which employees retire – provided there is strong justification for doing so. The case concerned a partner in a law firm who was asked to leave at the firm’s normal retirement age of 65, as per the partnership agreement. Although the case involved partners, the Court’s decision applies to employees too.
The partnership successfully argued that a compulsory retirement age gave younger associates the opportunity to obtain partnership within a reasonable timeframe, and meant that it could plan recruitment and promotion knowing when vacancies would occur. It also limited the need to expel underperforming partners. The Court found that the justification has to be legitimate in the particular circumstances of the employment.
National minimum wage increase
Finally, advance warning that new rates of national minimum wage (NMW) will apply from 1 October. For workers over the age of 20, the NMW rate goes up to £6.19 an hour, and for apprentices it will rise to £2.65; the other pay rates are unchanged.