Alison Wallace, head of employment practice at Steptoe & Johnson solicitors examines the raft of employment legislation planned for implementation in 2005 and takes a reflective look back at 2004.

Christmas Quiz

• Can a verbal warning be given without a disciplinary hearing?
• Can you still dismiss an employee instantly?
• Can an employee be discriminated against because of their age?
• How much is a capped week’s pay?

These are just some of the issues that caused confusion and doubt this year. Most HR professionals will be looking for a breather in 2005 from the raft of legislation and new case law which has landed on desks in recent months. See the list below for some of the most prominent aspects of employment law that will come into force next year.

Rising compensatory awards
It will be more expensive to dismiss somebody from 1 February. The limit on a week’s pay rises to £280 and the compensatory award to £56,800.

The Freedom of Information Act 2000
This will come into force on 1 January 2005. This gives any person including foreign nationals and businesses access to information held by public authorities. This new rule empowers workers to participate in the discussion of policy issues. The idea being to improve the quality of government decision making while holding government and other bodies to account. Its impact on HR matters is under consideration.

The Act will create new risks for businesses as commercially sensitive information becomes more accessible to competitors, customers, suppliers and interest groups. This should not be confused with the Data Protection Act 1998 which concerns the processing of personal data and which primarily regulates the release of personal information.

Pensions
Pensions are likely to take a front seat in 2005.

The Government has just issued a consultation paper and draft regulations under the Pensions Act 2004 which requires new employers to provide transferred employees with broadly equivalent pensions and benefits entitlements. The consultation period runs to January 2005 and the Regulations are likely to be implemented on 6 April 2005.

While the Government has made it clear they are clearly committed to tackling unjustified age discrimination in employment, there is no general consensus about how this can be achieved. The age discrimination strand of the Employment Directive is due to be implemented by autumn 2006. Any outstanding age audit of your business is now overdue.

The Government have also finally opted for a national default retirement age of 65 in order to comply with that legislation but there will be a right for employees to request working beyond this age. The default retirement age will be reviewed after five years.

The new rule has no direct implications for occupational or state pension arrangements. The default age will be accompanied by a right for employees who want to continue to work beyond the default age or their employees own justified retirement age to have their request considered seriously by their employer. This right will follow the model of the right to request flexible working for parents with young children.

The Government will be consulting in the summer 2005 on the draft regulations covering the full rights against discrimination on grounds of age, employment and vocational training. Subject to that consultation and the approval of Parliament, the legislation will be in force on 1 October 2006.

Information and Consultation of Employees Regulations 2004
The implementation of the Information and Consultation of Employees Regulations 2004 for employers of more than 150 employees comes into force next year. It is expected to have a huge impact on operations.

With effect from 6 April 2005 their employees will have the right to be informed and consulted about the business they work for including prospects for employment and substantial changes in work organisation or contractual relations.

The Regulations implement the EC directive on informing and consulting employees and are based on a framework for implementation agreed with the CBI and the TUC. The Regulations will apply to businesses with 100 or more employees from 6 April 2007 and with 50 or more employees from 6 April 2008.

Larger business, should consider whether to take the initiative and set up a consultation arrangement or wait until the requisite employees request this. If nothing is agreed, the default arrangements under the Regulations will apply but a pre-existing agreement can prevent the Regulations being triggered.

If that was not enough to be getting on with, October will see new provisions relating to sex discrimination and sexual harassment under the Equal Treatment Directive.

2004 highlights
Among the most significant events impacting on the HR and employment law arena in 2004 was the enlargement of the EU and the surprising dearth of Eastern European workers coming to the UK. Implementation of the statutory disciplinary, dismissal and grievance procedures also had a big impact.

Cases of importance – 2004:

• Barber -v- Somerset County Council relating stress at work
• Dunnachie -v- Kingston-upon-Hull County Council on compensation to injury to feelings
• Archibald -v- Fife Council on disability discrimination and reasonable adjustments required BNP Paribas -v- Mezzotero concerning without prejudice dismissals
• Rutherford -v- DTI age limitation on unfair dismissal claims

The latest annual Tribunals report shows that the number of applications is up 17% in the year 2003/2004 to 115,042. It remains to be seen whether the new statutory disciplinary and grievance procedures will impact on the figures from October 2004 onwards.

The trend for applications is to cite more than one head of claim and cases are becoming more complex with the hearings taking longer. The steepest rise is in the number of sex discrimination applications. Notwithstanding this, the median awards are:

• unfair dismissal – £3,375
• race discrimination – £8,410
• sex discrimination – £5,425
• disability – £5,652

Although there is greater scope for Tribunals now awarding costs in tribunal cases, by far the greatest factor influencing case settlements is the disproportionate costs involved in both bringing and contesting claims before a Tribunal.