April 2016 changes - get ready!
There are a number of employment law changes coming into effect in April 2016. A summary of the key changes is set out below.
• A significant development for lower paid workers is the introduction of the National Living Wage
. From 1 April 2016
, all workers aged 25 and over will be entitled to at least £7.20 per hour.
• From 6 April 2016, a new scheme will penalise employers who fail to pay tribunal awards or settlements agreed via ACAS. The penalty will be 50% of the unpaid sum, subject to a minimum of £100 and a maximum of £5,000. If the employer pays both the unpaid sum and the penalty within 14 days, the penalty will be reduced by 50%.
• For Tribunal claims issued on or after 6 April 2016, new Tribunal rules will introduce a deadline for making postponements of seven days before the hearing, as well as limiting the number of postponements to two for each party. Tribunals will be required to consider making a costs order or a preparation time order against a party who makes an application to postpone or adjourn less than seven days before a hearing.
• For dismissals on or after 6 April 2016, the maximum compensatory award cap for unfair dismissal will increase from £78,335 to £78,962 and the maximum amount of a week's pay (which is used to calculate statutory redundancy payments and various other awards) also rises from £475 to £479.
• A single-tier state pension replaces the current basic state pension and second state pension with a flat-rate payment from 6 April 2016 (to apply to retirements from that date). The ability for employer schemes to contract-out on a salary-related basis (by providing alternative benefits outside of the state pension) will disappear.
• Rules requiring certain public sector employees to repay exit payments where they return to work in the same part of the sector within 12 months are expected to come into force in April 2016.
For more information on the above changes or any other employment related matter, please contact the Employment Team.