New compensation limits

A number of new compensation limits come into force on 1 February 2007.

  Previously From 01.02.07
Limits on guarantee payments £18.90/ day £19.60
Limit on a week’s pay £290 £310
Maximum amount of a week's pay for calculating basic or additional award of compensation for unfair dismissal or redundancy payment £290 £310
Maximum basic award for unfair dismissal (30 weeks’ pay) £8,700 £9,300
Minimum basic award for dismissal on trade union, health and safety, occupational pension scheme trustee, employee representative and on working time grounds only £4,000 £4,200
Maximum compensatory award for unfair dismissal £58,400* £60,600*
Minimum award for employees excluded or expelled from a trade union £6,300 £6,600


* There is no limit where the employee is dismissed unfairly or selected for redundancy for reasons connected with health and safety matters or public interest disclosure ('whistleblowing'), or the dismissal is contrary to discrimination law.

In dispute

The Government has announced a review of the framework for settling disputes between employers and employees.

This will look at options for simplifying and improving all aspects of the current system and will involve business representatives, unions and other interested parties.

The review will build on evidence gathered recently by the Government about the effect of previous changes to the dispute resolution system.

It will look at all aspects of the system, including the current legal requirements, how employment tribunals work, and the scope for new initiatives to help resolve disputes at an earlier stage. It is expected to make recommendations for change in spring 2007.

Gain without pain

According to an analysis of unpublished findings from the Government's Labour Force Survey published by the TUC, the UK no longer needs to have a long hours opt out.

The report, Gain without pain, showed that removing the opt-out would have little economic effect. This is because:

  • the number of UK employees working more than 48 hours has declined by 17.5 per cent since the 1998 peak of four million, with 700,000 fewer employees now working long hours
  • the incidence of long hour working has declined in every industry, occupation and region, although the pattern of improvement is very uneven, with some sectors doing much better than others
  • a third of UK employees who work more than 48 hours per week are only working one or two extra hours per week.

Go to: www.tuc.org.uk/extras/gainwithoutpain.doc to download a copy of the report.

Women on the board

Although women make up 46 per cent of the workforce, they remain an endangered species on the boards of UK companies, according to the 2006 Female FTSE Report from the Cranfield School of Management.

The report showed that female–held directorships fell from 121 in 2005 to 117 in 2006. Of these, only 15 were held by female executive directors out of a possible 391. Things are not much better at the next level of management either. Only 53 companies have women on their executive committee, 30 have all male committees and the rest refused to say.

For a copy of the report, email: a.southgate@cranfield.ac.uk

Getting equal

Statutory guidance on the Gender Equality Duty (which comes into effect in April 2007) has now been laid before Parliament.

The code of practice gives practical guidance on how to meet the legal requirements of the duty and will help public authorities to make sure they are complying with it.

Although the code is still technically in draft form until it has been before Parliament for 40 sitting days, the current text will not change.

To read more about the duty and to download the code, go to: www.eoc.org.uk//default.aspx?page=19689

A grievance in time

The EAT has said in HM Prison Service -v- Barua that regulation 15 of the 2004 dispute resolution regulations extends the normal time limit for lodging a tribunal case, even if the employee had already started a grievance before the effective date of termination.

Dr Barua was told in February 2005 that his pay was to be cut. He handed in his notice on 25 April, giving the effective date of termination as 31 July.

On 27 June (ie during his notice period) he lodged a formal grievance about the pay cut. On 27 January 2006 he lodged a number of tribunal claims.

Because he lodged his grievance on 27 June, the EAT said he was entitled to the three month extension under regulation 15 which meant that his claim was still in time.

Strike out

If employers fail to obey tribunal orders, they can expect their case to be struck out, which is exactly what happened in Premium Care Homes -v- Osborne.

The employer had already breached various orders that the tribunal had made, when they turned up on the morning of the hearing with a long witness statement which Mrs Osborne had not seen before.

The EAT said that the tribunal was right to debar the employer from defending the claim (except in respect of compensation), because their unreasonable procrastination (which included deliberate delaying tactics) had prejudiced her chances of a fair hearing.

It’s unfair

The Court of Appeal has said in Commerzbank AG -v- Keen that section 3 of the Unfair Contract Terms Act 1977 does not apply to employment contracts.

Mr Keen claimed in the High Court that the provision in his contract stating that he would not receive a bonus if he was no longer employed by the bank was unreasonable, and therefore caught by the Unfair Contract Terms Act 1977.

The court disagreed and held that section 3 applied only “as between contracting parties where one of them deals as a consumer or on the other’s written standard terms of business”.

No such thing as a free-standing right

If someone has less than one year’s service, the EAT has said in the case of Scott-Davies -v- Redgate Medical Services that they do not have a free-standing right to complain about a breach of the statutory procedures.

In this case, Redgate Medical Services did not provide Mr Scott-Davies with a statement of his terms and conditions, nor did they follow the grievance or disciplinary procedures when they dismissed him.

However, as he did not have a year’s employment, he could not bring a claim of unfair dismissal, because, as the EAT made clear, “the complaint of failure to follow a statutory procedure is invoked only as part of an otherwise valid application”.

Age amendments

Following the briefest of consultations, the Government has now laid before Parliament a set of regulations that make a number of changes to Schedule 2 of the Employment Equality (Age) Regulations 2006.

These relate to the issue of pensions and age discrimination, and clarify and extend many of the exemptions relating to trustees and managers of pension schemes. The CBI called the changes “a victory for common sense”.

Go to: www.opsi.gov.uk/si/si2006/20062931.htm for a full copy of the regulations.

Caring for carers

After consulting carers’ groups and business organisations, the Government has announced the definition of “carer” that will be used for the right to request to work flexibly from 1 April 2007.

A carer will be an employee who is or expects to be caring for an adult who:

  • is married to, or is the partner or civil partner of the employee; or 
  • is a near relative of the employee; or 
  • falls into neither category but lives at the same address as the employee.

The “near relative” definition includes parents, parents-in-law, adult child, adopted adult child, siblings, uncles, aunts or grandparents and step-relatives.

DTI rights guide

Individual rights and responsibilities of employees: a guide for employers and employees is a free, up-to-date DTI overview of employment law.

It covers all the main topics – pay, dismissal, parental legislation, time off, anti-discrimination law, other statutory employment rights, complaints and remedies – of interest to trade union officials. And it’s written in plain English.

To order a copy of the guide, go to: www.dti.gov.uk/publications/index.html, press 'search' and enter URN 06/1833.