April Changes to the Law – A summary
We have previously reported a number of the employment law changes coming into force from 6th April 2014 in our updates, which can be seen here; a brief summary of these is included in as a useful reminder:
Employment Law Changes from 6th April 2014
- ACAS Early Conciliation Scheme – mandatory pre-claim conciliation, i.e. EVERY claimant wishing to lodge a claim with the Employment Tribunal MUST first go through this 4 stage scheme (nb. 6th April – 5th May is a transitional period, it actually becomes mandatory from 6th May)
- Financial penalties for losing employers – for cases presented after 6th April 2014 Tribunals will have the power to order that a losing employer pays a financial penalty where ‘aggravating features’ exist
- Increase in statutory payments – i.e. statutory sick pay, maternity pay, paternity pay, adoption pay, and the cap on “a week’s pay”, basic and compensatory award for unfair dismissal and guarantee payments
- SSP Changes – Abolition of both the employer’s Statutory Sick Pay record-keeping obligations; and the Percentage Threshold Scheme (which allowed employers to reclaim SSP from HMRC, where the total SSP paid in a month exceeds 13% of their Class 1 National Insurance contributions for that month)
Important matters for Business from the Budget 2014
- Anti-avoidance tax measures – as we have reported previously, HMRC are clamping down on ‘false self-employment’ – so employment intermediaries BEWARE! From 6th April 2014 you will become accountable to HMRC for the tax and NICs on remuneration received by workers from deemed employment that is not otherwise subject to PAYE (similar rules apply to ‘offshore intermediaries’) – for the latest HMRC guidance see here
- Extension of the Apprenticeship Grants for Employers scheme – this will provide grants for employers for an additional 100,000 apprenticeships by 2015-16
- Tax Relief for Occupational Health – the introduction of a tax exemption for amounts up to £500 paid by employers for medical treatments for employee
LAW IN BRIEF:
Post-termination restriction effective despite drafting error
Earlier this month the High Court granted an injunction* to enforce a 12 month non-compete restrictive covenant which had been drafted incorrectly and left the employer, a software developer, no protection at all, unless it was amended.
The Court took the unusual step of applying the ‘business common sense’ approach and thereby looking at what the parties had intended the clause to mean (with reference to other clauses within the contract), and then allowing words to be inserted into the original clause to give effect to that meaning.
This ultimately meant that the employee was bound by the restriction and the employer was successful in protecting their legitimate business interests. The unusual stance in the case was undoubtedly influenced by the bad faith of the employee, who had lied about where he was going to work in order to induce his employer to release him from his notice period early and was unconvincing to say the least in his evidence before the court.
The time and expense to both parties in this matter (and the new employer who was also asked to give undertakings that they would not allow the employee to breach his restrictions), should serve as a stark reminder of the importance of getting clear and enforceable restrictions in place from the outset!
*Prophet plc v Huggett  EWHC 615 (Ch)
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Please note that the information contained in this article was correct at the time of writing. There may have been updates to the law since the article was written, which may affect the information and advice given therein.