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Employment Act 2002


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The Employment Act 2002 will come into force in April 2003. It covers three main areas: 

  1. Working parents - maternity, paternity and adoptive leave and pay

  2. Dispute resolution 

  3. Improving the skills of employees

This bulletin highlights the main proposals.

Paternity and maternity leave

Two weeks paid paternity leave within 56 days of birth or adoption of a child for new fathers. Statutory Paternity Pay will be at the same standard rate as Statutory Maternity Pay - £100 per week (or 90% of average weekly earnings if this is less).

The minimum entitlement to ordinary maternity leave or adoption leave is to increase from 18 to 26 weeks and the right to Statutory Maternity Pay will be extended to the same period.

The normal provisions under which larger employers can recover 92% of SMP from the State are to be extended to enable recovery of monies due to the Inland Revenue. The 105% recovery by small employers will continue to be set off against NI contributions.

Employment Tribunals and Dispute Resolution

The extension of the powers of employment tribunals and EAT to award costs.

Tribunals will have the power to postpone hearings to facilitate conciliation.

The President of the Employment Tribunals will have formal power to issue practice directions.

For forms to be standardised to facilitate determining of disputes without a formal hearing. Also extending the power of tribunals to strike out cases without merit at a pre-hearing review.

In every contract of employment a new contractual term is to be implied incorporating the minimum standards for formal disciplinary and grievance procedures.

Tribunal awards to employees are to take into account any failure to follow the minimum standards outlined. Percentage adjustments are to be made before any reduction for contributory conduct by the employee.

The time limits for claims to tribunals are to be relaxed to assist the correct operation of disciplinary and grievance procedures.

The original Bill provided regulations that required employees to exhaust internal grievance procedure arrangements before bringing claims of particular types before an employment tribunal. This clause has been completely redrafted and is to become primary legislation.

Further clarification is expected regarding employers who failed to use proper internal procedures and use the ‘Polkey’ defence ‘it wouldn’t have made any difference anyway’.

The exemption of small employers from the rules in ERA 1996, requiring employees to be given details of disciplinary and grievance procedures, is to be withdrawn and the requirement itself is to be modified.

In employment law, compromise agreements are only legally binding in relation to a ‘particular complaint’ or complaints. The government were considering removing this clause, but this has now been dropped.

Equal pay, union learning representatives and fixed term employment contracts.

A new section 7B is to be inserted into the Equal Pay Act 1970 to introduce an equal pay questionnaire.

A new s.168A is to be inserted into the Trade Union and Labour Relations (Consolidation) Act 1992 to give Union Learning Representatives the statutory right to a reasonable amount of paid time off work to carry out their role. Dismissal of a person who asserts this right will be added to the list of automatically unfair dismissals.

The Employment Bill will make it unlawful to pay fixed-term workers less than others. This also concerns the provision of pensions as it will become unlawful for occupational pension schemes to exclude temporary employees who are on fixed-term contracts, if comparable permanent employees are eligible for membership.

The weekly rate of maternity allowance for women who have paid sufficient NI contributions will be brought into line with SMP. The Act allows for claimants of various Social Security Benefits who are not married but have a partner to lose the benefits if their partner refuses without ‘good cause’ to attend an interview.

July 2002

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This article is an employment law e-ssentials bulletin produced by Hegarty & Co

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