Employment Law Changes for 2013

Last year saw the beginning of the Coalition Government’s shake-up of employment law, with the most significant change being made to the qualifying period for unfair dismissal claims, which increased from one year to two years for new employees commencing employment from April 2012.

Following other proposals made by the Government throughout 2012, many under the Enterprise and Regulatory Reform Bill (ERRB), 2013 is likely to be another year which will see significant reforms to employment law. Employers and employees will need to adjust to these changes. We set out below a summary of the main legislative changes which are expected to be implemented during the course of 2013.

1 February 2013: Increase to tribunal awards

The maximum compensatory award for unfair dismissal in the Employment Tribunal will increase from £73,200 to £74,200 and the limit on a week’s pay for basic awards will increase from £430 to £450.

March 2013:

Parental leave

Statutory unpaid parental leave entitlement will increase from 13 to 18 weeks by 8 March 2013 (the deadline set by the European Parental Leave Directive).

Liability for third party harassment

The provision in the Equality Act 2010, which makes employers vicariously liable to their employees for third party harassment, is expected to be repealed under the ERRB. However, the Government has suggested this will not affect the liability of employers to their employees under the general harassment provision, where an employee is harassed by another in a manner that relates to a protected characteristic, which violates the employee’s dignity and creates an intimidating, hostile, degrading, humiliating or offensive environment for the employee. This can only be clarified by case law, if the third party harassment provision is removed and employees turn to the general harassment provision. Protected characteristics are age, disability, gender reassignment, race, religion, belief, sex and sexual orientation.

Discrimination questionnaires

The ERRB will also repeal the provision in the Equality Act 2010 which allows employees and ex-employees to serve questionnaires on employers requiring information on alleged discrimination for the purposes of potential or actual discrimination claims.

April 2013:


The Growth and Infrastructure Bill is expected to receive royal assent. If so, it will introduce a new employee-shareholder status allowing employers to offer shares to their employees worth a minimum of £2,000 in exchange for the employee giving up certain employment rights. The shares will be exempt from capital gains tax for disposals up to a value of £50,000. To find out more read our bulletin on the potential new employee-shareholder scheme.


The current legislation on whistleblowing will be amended by the ERRB so that individuals will only get protection in respect of whistleblowing where the disclosure is in the public interest. This will prevent employees from whistle blowing about a breach of their employment contract by the employer where the public interest is not at issue.

Collective redundancy

For large scale redundancies affecting 100 or more employees, the statutory collective consultation period will be reduced from 90 days to 45 days. For smaller redundancies affecting between 20 and 100 employees, the consultation period will remain at 30 days. The Government has also revealed plans to legislate so that the expiry of fixed term contracts will not trigger an obligation to consult, although employers will still need to follow a fair process to avoid the risk of unfair dismissal and discrimination claims.

Summer 2013: Tribunal fees

The Government has confirmed its intention to introduce tribunal fees this summer. A fee will be payable on issuing a claim (either £160 or £250) and on proceeding to a hearing (either £230 or £950). The fee for submitting an appeal to the Employment Appeals Tribunal will be £400 and the hearing fee will be £1,200. The level of fees will depend on the complexity of the claim and tribunals will have the power to order the unsuccessful party to reimburse the fees to the successful party. There will be a fee remission system available to those who cannot afford the costs (with a view to protecting access to justice for all), as in the civil courts. While the Government’s intention in introducing the fees is to make users of the service contribute to the cost of running of employment tribunals (currently around £80m per annum), from an employer’s perspective the fees will help deter employees from bringing spurious claims.

Further changes expected in 2013: The Enterprise and Regulatory Reform Bill

The ERRB also sets out other changes expected to be implemented this year. These include:

  • Financial penalties on employers for substantial breaches of employment law. Penalties are likely to be between £100 and £5,000, will be at the discretion of the employment judge and will be reduced by 50% if an employer pays within 21 days.
  • A mandatory ACAS conciliation procedure before a claim can be brought to an Employment Tribunal.
  • Equal pay audits ordered by a tribunal, where an employer has breached equal pay or sex discrimination laws related to pay.
  • Pre-termination negotiations will become inadmissible as evidence in an action for unfair dismissal.

Finally, we expect to receive the Government’s response to its consultation on the Working Time Regulations regarding proposals to allow employees to carry-over leave where an employee has been unable to take leave due to sickness absence. And we now have the Government’s consultation on changes to TUPE and its plans to abolish the rules on service provision change, which we will cover in a separate update.


Employee-shareholders Without Employment Rights: Does it Stack Up?

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.